Sprint's Push-To-TalkFriday, December 04, 2009
Last week Sprint announced it would no longer sell QChat, the Qualcomm/Motorola/Nextel-developed push-to-talk system (PTT), on its CDMA EV-DO Rev A network. (QChat requires EV-DO Rev A.) Instead, it will continue to support Nextel’s iDEN push-to-talk offering. Nextel, you might recall, started out as Fleetcall and was based on Specialized Mobile Radio (SMR) or trunked radio systems that were push-to-talk-based. Nextel morphed into a cellular-like service but not on cellular spectrum. It acquired many SMR operators around the United States and converted their systems into to a cell-like network, retaining the PTT feature.
When Sprint purchased Nextel (or the companies merged, depending on how you look at it), the object was to implement PTT on the CDMA network, migrate the Nextel customers to CDMA PTT, and then to finish the project of rebanding the Nextel channels that was underway. The new company would eventually end up with enough contiguous spectrum at 850 MHz to deploy CDMA and have both 850 MHz and 1900 MHz CDMA to better compete with Verizon and AT&T, which already had a mix of the two bands. However, the rebanding required by the FCC because of Nextel’s interference to public safety and other two-way radio systems did not go as planned. Several years after the rebanding was scheduled for completion, it is still not finished and it has cost $billions more than anticipated.
Sprint was able to deploy Qualcomm’s QChat, a very robust PTT service, over EV-DO Rev A while Verizon was not. This was due to a contractual arrangement between Qualcomm and Motorola and some say Nextel. The agreement stated that QChat could not be deployed anywhere there is an iDEN system in service. Since Sprint and Nextel were now one and the same company, Sprint was permitted to deploy QChat and it did. Sprint also built some bridging between the Nextel PTT and QChat over EV-DO Rev A to provide for interoperability between the two PTT services. But their plans to migrate all Nextel customers to Sprint fell by the wayside. Sprint became distracted with other issues including customer retention and WiMAX, and for a few years, both PTT systems have been available.
Now Sprint has totally reversed course, stating that it will no longer sell QChat on its CDMA network and will instead spend time, money, and effort keeping the iDEN (Nextel) network in place and even enhancing it. Meanwhile, AT&T rolled out its own PTT offering provided by Kodiak networks and Verizon finally added PTT with an offering by Motorola that also requires EV-DO Rev A. PTT has not been a big seller, except for Nextel, but there are a number of companies and individuals who do use it on a regular basis. And now there are some things happening in the two-way radio world that could push many two-way radio customers over to commercial PTT services.
So why did Sprint make this move? The first things that come to mind are that if it were to sell off Nextel it would no longer be able to offer QChat over its CDMA network because of the original contractual agreement, stranding a number of PTT customers or losing them to another network. It is also possible that Sprint has not been selling much in the way of Sprint CDMA PTT services and has decided it is not worth the effort to continue offering it. (Sprint has stated that it will continue to support its existing PTT customers.) It is also possible that because of its belief in WiMAX and its relationship with Clear, that it will not be building out much more CDMA EV-DO Rev A, which means it will not be in a position to offer Sprint PTT in some of the areas where Nextel’s PTT is not available.
A high percentage of Nextel’s installed base uses the PTT feature, but don’t forget that every single device on the Nextel network has PTT capabilities. On the Sprint CDMA network, as well as Verizon’s and AT&T’s GSM/HSPA network, the choice of PTT handsets is limited. You have to ask for PTT and buy one of the few handsets that support it, whereas on the Nextel network, no matter what device you buy, including a BlackBerry, you get PTT as part of the package.
Is Demand for PTT Dying?
Today’s numbers show that PTT is used by a small portion of wireless device customers, and the new PTT services that have been added to AT&T and Verizon are not setting any records for sales. However, as mentioned above, the next three years could be good for commercial PTT services. By January 1, 2013, all existing two-way radio customers using spectrum between 150 MHz and 512 MHz will have to replace their equipment with newer, narrowband equipment. This has been known for a number of years and many customers have been buying equipment that is capable of narrowband operation and they will be ready for the deadline. However, there a many more who have not yet come to understand that their entire fleet of twenty-year-old radios will have to be replaced, and that the cost of a new two-way radio can run anywhere from $300 to several thousand dollars. Replacing this equipment could cost thousands or tens of thousands of dollars.
It would be much less expensive to simply replace existing two-way radio systems with commercial phones that include PTT service as part of the offering. In many cases, commercial network coverage in a given region is as good if not better than many two-way radio systems, most of which are strictly regional in nature. There is an opportunity for commercial network operators to replace existing two-way radio systems with their own commercial PTT systems, but in many cases it is not as simple as that. Many of these systems are dispatch-based and use computer software to track vehicles, route them, and send and receive service and call reports (all using voice), so any replacement system will have to include this type of software. However, on the plus side, two-way radio customers carry wireless phones today. If they choose to move to a commercial network, they will have the added capabilities of broadband data, vehicle location via GPS, and network tracking if they so desire.
So there is that market, and there is the teen market, which I believe commercial network operators have missed. Facebook, Twitter, and other social networking offerings have been pushed to the forefront by the younger generations. Texting is mostly for younger folks, and they are also heavy voice service users. However, no one has tried offering one-to-many PTT services specifically to this age group. Think of it as Twitter for voice, or updating a Facebook page in voice. Groups could include friends, girls only (for girls), or guys only (for boys). You could have groups of two, five, or thirty, and with a single push of a button reach all of them in real time. I think this is a market that could be tapped, but it probably would require cross-network PTT services to become hugely popular.
Nextel also did well with the public safety community over the years. While it tried and mostly failed to persuade counties and cities that it could satisfy all of the first responder communications requirements (which it cannot), it did end up with a number of public safety accounts and is widely used today for administrative and other non-emergency traffic to free up emergency dispatch channels for more urgent communications. Nextel is also good for senior officers who are out in public and don’t want a two-way radio squawking in their ear all of the time but need to be instantly in contact with their dispatch center in the event of an emergency.
There is no reason this type of secondary usage cannot be accomplished over any of the networks that offer PTT today, except perhaps that there are not enough choices of PTT-capable phones. Suppose a Verizon BlackBerry had PTT capabilities, or the AT&T iPhone. Both would appeal not only to public safety executives but also, perhaps, to the younger generation. I believe PTT is languishing because what drove it in the first place—two-way radio customers who were accustomed to having PTT—have either stayed with two-way radios, moved to Nextel, or found they did not really need PTT functionality. I have not seen anyone try to sell PTT for other purposes or uses and I believe it could become popular again if someone spent some time and effort developing new markets.
In the meantime, will Sprint sell Nextel? One reason for Sprint to stop offering PTT on its CDMA network is to keep Nextel churn to a minimum. The more customers Nextel loses, the less the network is worth to someone else. And if Sprint does sell Nextel, it probably won’t be able to continue to offer QChat on its own network. If Sprint is not preparing to sell Nextel, perhaps it has simply lost interest in moving customers to its CDMA network. Nextel already offers GPS location services, industrial-strength devices, and lots of sales force, service/repair, and vehicle tracking software, so perhaps moving those customers to Sprint’s network doesn’t make sense.
Then again, perhaps Sprint doesn’t want to continue to invest in additional coverage for its CDMA EV-DO Rev A network, which is required for QChat PTT. Maybe Sprint doesn’t want to offer services it cannot support across its entire network. Perhaps it believes that the Clear WiMAX network will eventually out-cover its own EV-DO network, or perhaps it doesn’t want to have to sell combination devices for WiMAX and Sprint as well as for Nextel and Sprint. Or it could be that consolidating PTT back into Nextel will enable most of the Sprint sales force to once again concentrate on the Sprint network and now the Clear network. It must be difficult to explain the differences between three networks, each with its pluses and minuses.
Whatever Sprint’s reasons for deciding it will no longer sell PTT on its CDMA network but will continue to actively sell it on Nextel’s network will become clear, I am sure, with time. In the meantime, I would love to see the Nextel network donated to the Public Safely Spectrum Trust (PSST) and used in conjunction with the PSST’s broadband spectrum at 700 MHz. Public safety interoperability needs to be both voice and data, and Nextel’s existing network, augmented in some areas, could become a good nationwide backbone for voice interoperability. I don’t expect Sprint to simply give Nextel away, but I wouldn’t be surprised to find out it is being packaged for sale.
Andrew M. Seybold