AT&T Wireless eyes push-to-talk

After being the talk of the town last week in Cannes, push-to-talk service this week is the toast of New York, with AT&T Wireless saying at a Merrill Lynch investors conference there that it plans, like Verizon Wireless and Sprint PCS, to test the application later in the year.

Joseph McCabe, chief financial officer at AT&T Wireless, told the Merrill Lynch crowd that the nation’s second largest wireless carrier plans to test a push-to-talk service in the third quarter this year, by offering GSM/GPRS phones with the push-to-talk function to some users in Seattle.

A company spokesman said AT&T's subsequent plans for the service haven't been worked out yet. "We're still working through the details. We want to test it and see what the technical challenges are," he said.

AT&T Wireless was rumored to be toying with the idea of offering push-to-talk service more than four years ago, when the carrier was said to be working on a switch-based solution with network vendor Ericsson, but nothing ever came of those reports.

This week’s confirmation of plans from AT&T comes about one week after Ericsson, Nokia and Siemens said at the 3GSM World Congress in Cannes, France, that they were working together on an open-standard push-to-talk specification for GSM/GPRS and EDGE network operators. The AT&T spokesman said the company supports that effort.

Kaufman Bros. analysts watching that announcement said it was further indication that push-to-talk is beginning to fade for Nextel Communication, the network operator that pioneered it.

Meanwhile, Nextel CEO Tim Donohue, another speaker on the Merrill Lynch conference docket, has been telling analysts this week that despite recent announcements by AT&T and—earlier this month—Verizon Wireless, to offer the service, he thinks other carriers will have a hard time reproducing the application that made Nextel a distinct force in the wireless market.

It’s no surprise that more carriers are pushing to give push-to-talk a try. Nextel has become the fifth largest wireless carrier in the U.S. based largely on its success migrating push-to-talk from a service once primarily used by trucking fleets to more mainstream corporate usage (Nextel and Motorola, its iDEN infrastructure provider, celebrated the 10th anniversary of the maiden call of Nextel’s Direct Connect offering in December.)

Furthermore, after overcoming a $2 billion loss in 2001 to report a profit for 2002, Donohue told the Merrill Lynch conference attendees earlier this week that his company expects at least 1.7 million new subscribers in 2003, based on projections of strong first quarter sign-ups so far.

It is presumed that carriers such as AT&T and Verizon Wireless, as well as Sprint PCS, which has been prepping a push-to-talk offering for more than a year, will offer nationwide push-to-talk service immediately upon their commercial launches. Nextel doesn’t offer a nationwide service yet, but Donohue told conference attendees that should happen this summer.