Has push-to-talk got what businesses need?

New revenues from voice? That's the prize mobile operators are hoping push-to-talk technology will deliver. Tony Hallett looks at the main concerns for operators and users in light of Europe's first foray into this area, announced last week.

Orange's imminent launch of a push-to-talk (PTT) service - offered by its mainly European networks but available around most of the world through GSM roaming - marks the beginning of a year of change for the mobile industry.

Yet there are plenty of question marks surrounding PTT. It is commonly referred to as a 'walkie-talkie'-style service: however, it has also - quite often inaccurately - been teed up as a possible SMS killer, because in many implementations there will be more to it than a simple voice application. The biggest conundrum is whether, through its various uses, it will prove able to increase operators' all-important average revenue per user (ARPU) figures.

Orange CEO Sol Trujillo called his company's TalkNow service "a key for accelerating growth across the group" last week, promising "voice is going to get even stronger". But after demonstrating TalkNow's instant person-to-person chat functionality, his lieutenants promptly demoed the ability to convert group messages into a regular conference call or send voice messages to a pre-assigned or on-the-fly group.

It was clear that most of those assembled for the launch were witnessing something new, yet this way of communicating is not so novel in the US, which is largely pigeonholed as a cellular backwater. Subscribers to the networks of Sprint, Verizon Wireless and - most famously - Nextel have been using PTT for some time.

Jeremy Green, wireless principal analyst at Ovum, points out that these operators have won custom with PTT but notes: "It's the bundling... that makes it more attractive."

There is the well-trotted-out characterisation of the typical Nextel PTT user being a construction worker on a site or real estate agent out in the field - and that's not uncommon - but plenty of users are your average consumer who wants a convenient chat option.

Jason Kenagy is director of product development at Qualcomm - which works with Nextel - for BREWchat, that equipment vendor's PTT offering. "Consumers have latched on to the walkie-talkie aspect," he said. "But other operators around the world have seen Nextel's ARPU and thought 'Holy mackerel' because they have been able to increase it without cannibalising traditional cellular calls."

Clearly most European operators that roll out PTT - and there are set to be a few this year, with analyst house EMC recently telling us to look out for T-Mobile and Vodafone "in the coming months" - won't be jumping in at the consumer deep end. Orange may be addressing that market by the start of 2005 by being able to roll out the TalkNow client on new phones rather than have it downloaded to the type of smart phone only high-end users tend to own, but for now it talks openly about selling it at a "premium".

Mark Boulding, senior associate analyst at Quocirca, said: "Most operators will be aiming for a mid-year launch but to a certain extent this will replace standard calls and may even undermine SMS."

Orange executive VP Richard Brennan has talked about how 80 per cent of over-40s have never sent a text message and how TalkNow voice messaging might be for them. But it is unlikely he has in mind a drop-off from textaholics who substitute the new alternative.

Other concerns about whether operators can make PTT fly are centred around its quality, especially if they are talking about charging a premium to business users, and cultural adoption.

Gartner analyst Jason Chapman reckons a stumbling block could be latency - a stilted conversation over a satellite connection can be painful but imagine adding on an extra second in between each response.

He predicts PTT success in the youth market - "provided it is priced and positioned properly".

However, as with desktop instant messaging (IM), experts are pointing out the etiquette of PTT is also critical. The same executive that will love the immediacy of simultaneously directing several colleagues to a business lunch at a hard-to-find restaurant won't be happy when one of those colleagues butts into an important client meeting three hours later.

Kenagy's team at Qualcomm is among those around the world working on ways to make sure PTT messaging doesn't become "obnoxious". Referring to the shortcoming of desktop IM (where the first line of any exchange is typically 'Are you there?'), he said: "We want to do presence the right way rather than just doing IM. A word which comes up again and again is etiquette."

For a gang of teenagers, jumping in and out of classes at school or hanging around a dreary suburban town centre, chatting on the fly, sending messages or managing your presence might be second nature. For a besuited user of a high-end smart phone, such as the Treo 600 (Orange's TalkNow launch device) or Microsoft-based Orange SPV (another of the operator's babies) it may all just seem like too much hassle.

By the end of the year, when the premium business push has passed its first stage, we're likely to know.