Push-to-Talk Brings Voice-Based Instant Messaging to Europe

Transcription

1 Research Brief Push-to-Talk Brings Voice-Based Instant Messaging to Europe Abstract: Push-to-talk services will soon let Europe s mobile phone users send voice messages via IP, boosting data revenue. Young people will take to "instant messaging via voice," but only if it works smoothly and is affordable. By Stéphanie Pittet and Jason Chapman Recommendations Push-to-talk services are making a quiet entry into Europe, following success in the United States. Europe's mobile operators should consider launching services that use the "Push to Talk over Cellular" specification to increase data traffic on GSM networks that support the general packet radio service (GPRS) or Enhanced Data Rates for Global Evolution (EDGE). Those that do launch these services should: Target the youth segment of the consumer market, and use a low-cost pricing model so that young people can afford the service and the phones needed for it. Make them easy to download, launch and use. Maximize their appeal by making presence information available to users. Publication Date: 5 November 2003

2 2 Push-to-Talk Brings Voice-Based Instant Messaging to Europe Think of Push-to-Talk as Instant Messaging via Voice Push-to-talk technology lets mobile phones function rather like walkie-talkies. It brings a new one-to-one and one-to-many voice service to Europe's mobile networks. A push-to-talk service is most likely to appeal when it uses presence information to show which of your contacts are online before you send them a voice message. It then seems like instant messaging but with voices rather than text. You just select one or more contacts, press the phone's "talk" button while speaking, and release it to send the message. Push-to-Talk Reaches Europe The United States leads this market. This is largely thanks to Nextel, which has offered a service for two years. It uses Motorola's Integrated Digital Enhanced Network (iden) technology to achieve a high-quality, low-latency service, which is aimed at blue-collar workers. Nextel has 11.7 million users and, thanks partly to the popularity of its push-to-talk service, generates average revenue per unit of about $69. This is $20 more than some of its rivals in the United States, so it's easy to see why many are considering push-to-talk services. A new service from Verizon won 40,000 customers in its first three weeks. Europe's mobile operators also want to emulate Nextel's success. None has yet launched a push-to-talk service, but trials are under way. One service is available in the United Kingdom, however. Recently, fastmobile a provider of push-to-talk systems launched its "fastchat" service in partnership with Phones 4u, a distributor of mobile products. At present, this service is available only on phones that use the Symbian operating system, but it should reach many other devices in the next few months (including Microsoft Windows Mobile products and Palm OS machines that have cellular capability). Widespread deployment of push-to-talk technology in Europe will take at least another 12 months because large infrastructure vendors, including Ericsson, Motorola and Nokia, have yet to release products. Most plan to do so in mid Push-to-Talk Won't Replace Private Mobile Radio Vendors of push-to-talk services don't claim their offerings will replace or even compete against Europe's Private Mobile Radio (PMR) cellular services, such as Terrestrial Trunked Radio (TETRA). Push-to-talk suffers from higher latency, and traditional reasons for using PMR in certain markets still apply (see "Europe's Standard Shows Way Forward for Private Mobile Radio," TELC-WW-DP-0557). It's true that governments, emergency services and other PMR users that need high-quality service are unlikely to switch to push-to-talk. But those who can accept lower quality may well consider push-to-talk a money-saving alternative.

3 3 Technical Approaches Differ for Now A technological standard for push-to-talk services over mobile networks emerged only recently. A Standard Emerges In September 2003 Ericsson, Motorola, Nokia and Siemens mobile building on announcements made at February's 3GSM World Congress announced the completion of a voice over Internet Protocol specification based on the IP Multimedia Subsystem defined by the 3rd Generation Partnership Project (3GPP). Push to Talk over Cellular (PoC) as the four manufacturers call it uses existing specifications from the 3GPP, Open Mobile Alliance and Internet Engineering Task Force. This makes it easy to incorporate into mobile operators' access networks and packet-switched core infrastructure. It works like this. The voice message passes from a PoC-enabled mobile phone, over the GPRS- or EDGE-enabled radio access network, through the core network, and on to the PoC servers that control the application using the Session Initiation Protocol (see Figure 1). It is then routed to the recipient's PoC phone. This approach has yet to see commercial use, but trials are under way in Europe. Ericsson, Motorola and Nokia expect to release products in Other industry players also support it. Among them is Sonim Technologies, an independent PoC provider that has strong relationships with large vendors, including Ericsson. Figure 1 Outline of a 3GPP-Endorsed "Push to Talk over Cellular" Network Radio access network (GPRS/EDGE) Core network (SGSN/GGSN) Applications network (IMS/PoC server) PoC-enabled mobile phones GPP = 3rd Generation Partnership Project EDGE = Enhanced Data Rates for Global Evolution GGSN = gateway GPRS support node GPRS = general packet radio service IMS = IP Multimedia Subsystem PoC = Push to Talk over Cellular SGSN = serving GPRS support node Source: Gartner Dataquest (November 2003)

4 4 Push-to-Talk Brings Voice-Based Instant Messaging to Europe Fastmobile Uses a Thin-Client/Server Architecture A different approach, using a thin-client/server architecture, is taken by fastmobile. Users download client software to smartphones, and access the server supporting the service via a mobile Internet connection. The server is controlled by fastmobile, not by a mobile network operator. This is a proprietary solution, but fastmobile expects to be able to alter it to comply with technical standards that will themselves change. For any application to succeed in Europe, interoperability across networks is essential. That means having to comply with a standard. Presence Information Makes All the Difference Information about user presence isn't needed for either approach to work, but integrating it makes for a most attractive service. The ability to see who is online before starting a chat session will prove very useful as it has for PC-based instant messaging services like AOL Instant Messenger and MSN Messenger. Integrating support for presence information will increase usage, and could pave the way for services like text-based instant messaging and delivery of time-sensitive content. All vendors working on push-to-talk services agree that presence information is essential for success, especially in the consumer market. How Europe's Operators Can Market Push-to-Talk Mobile operators can make push-to-talk available in two ways. As part of an existing service package (such as Vodafone live!). This implies a price rise that subscribers will have to pay more whether they use push-to-talk or not. In the United States, Nextel subscribers with push-to-talk as part of their package pay 50 percent more than those who don't. As an optional extra, with a higher subscription fee. Verizon offers this in the United States. It charges an additional $60 a month for push-to-talk. Mobile operators have three more specific pricing options for push-to-talk services, depending on the intended market and expected levels of use. They could charge: An "all you can use" monthly subscription (subject to a reasonable-use limit). This would suit heavy users, such as communities that need to keep in touch at all times and site workers who want a device that combines a walkie-talkie with a mobile phone. An "all you can use" daily subscription. This would suit occasional users, such as friends who need to discuss where to meet for a sports event. In the United States, Boost Mobile a branch of Nextel that focuses on the youth market charges $2 a day. For each message sent as with the Short Message Service (SMS). Operators could charge less for replies than for initial messages. They could also have special prices for bundles of messages. Two kinds of business model can connect mobile operators and vendors of push-totalk systems. Revenue-sharing agreement. For example, fastmobile counts how many messages have been sent, and the mobile operator then charges users for that number. The net revenue, excluding airtime revenue, is then shared equally between fastmobile and the operator.

5 User-based licensing agreement. Sonim uses this model, following the example of the software industry. The vendor sells its push-to-talk platform to the operator, and then generates further revenue from license sales, based on the number of users. Price and Positioning Will Be Crucial Regardless of the business model, the price charged to users will be crucial. This isn't just a matter of finding the right price to trigger widespread usage. It means having pricing options to suit the needs of the most likely types of user. The industry must also position push-to-talk services intelligently. Problems with network availability and service quality mean it's neither a simple replacement forpmrservicesnoranidealchoiceforlargecompaniesthatneedpush-to-talk walkie-talkie services. Where push-to-talk has most potential in Europe is in the youth market, which is already familiar with PC-based instant messaging. We expect operators to combine push-to-talk technology with presence information and to market the resulting service as "voice instant messaging," rather than as a walkie-talkie application. We don't believe push-to-talk will replace text messaging in the youth market. Instead, young SMS users will view it as a complementary way to stay in touch. Phone availability and prices must also suit this market's needs. Young consumers tend to buy low-cost phones, so support for push-to-talk must not be limited to costly high-end models. 5 Factors That Promote and Discourage Push-to-Talk's Adoption in Europe Key drivers: PoC can help operators make more money out of 2.5G and third-generation networks that are underused by data traffic. Push-to-talk services are easy for users to understand as a marriage of voice telephony and instant messaging. Key inhibitors: The industry must comply with a common technological standard, as it's essential that users can exchange messages across different networks. It was only once SMS services became fully interoperable that they achieved success. Equally, the Multimedia Messaging Service is still hampered by interoperability problems, despite the progress operators have made. Latency problems will deter some business users, until networks are improved. Mobile operators must recognize the service's limitations and segment their market accordingly. The industry has to ensure that services and the phones required to use them are affordable for the youth market.

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