Subject: [NEXTEL-1] Ericsson Pushes On

From: Marcelrf <[email-masked]>
Date: Wed, 31 Mar 2004 15:45:22 -0500

Ericsson Pushes On
03.31.04

LONDON, U.K. -- PTT European Summit -- Swedish vendor LM Ericsson
(Nasdaq: ERICY - message board) is attempting to allay fears over the
long-term revenue potential of push-to-talk (PTT) services in Europe,
following recent concern over technology standards and user demand.

PTT-type technology allows people to use their handsets as
walkie-talkies, merely pushing a button to talk to another user or group
of users.

Such a service has already experienced significant success in the U.S.,
with Nextel Communications Inc. (Nasdaq: NXTL - message board) claiming
to generate around 20 percent of its revenue from the technology (see
Nextel's Nationwide Walkie-Talkie). Last August Verizon Wireless
launched a similar offering (see Verizon Pushes-to-Talk, Finally ).
This lone success story has seen the technology touted as the wireless
industry’s revenue savior, with European carriers preparing to roll out
PTT-type services later this year (see Orange Pushes Startup, MMO2 Joins
PTT Gang, and Europe Catches PTT Bug).

Despite the hype, the technology has been hit by a series of setbacks.
Nokia Corp.'s (NYSE: NOK - message board) decision to renege on an
industry standard partnership with Ericsson has added to fears that
interoperability issues will strangle market growth (see Nokia Pushes
Off and Poll: PTT Problems Ahoy!).

Meanwhile the demise of Dolphin Telecommunications Ltd. -- a U.K.
carrier offering mobile workforces a public radio technology similar to
Nextel’s successful iDEN PTT functionality -- has led analysts to
question European market demand for such services (see Dolphin Gets
Canned and IDC Plays Down PTT).

Ericsson is eager to play down the long-term effect of either event on
the market, claiming that company research into trial adoption in
Sweden, the U.K., and Italy justifies carrier interest in the
technology.

Niclas Medman, senior marketing manager at the vendor’s business unit
systems division, argues that European PTT services are unlikely to face
the same fate as those suffered by Dolphin, due to differences in target
markets.

“One major takeaway from our research was that this is of particular
consumer interest, rather than business, as in the U.S,” he comments.
“The results of the trials showed a high level of consumer interest in
the technology.”

As for the Nokia incident, Medman is confident that initial efforts to
jointly develop a PTT-over-cellular (POC) specification will not be
wasted. “Of course, we would rather see just one spec in place, but this
sort of thing is not atypical with new services.  What is reassuring is
that everyone seems to agree that in the end they will join the POC
track. Having a single vendor approach will not benefit the industry.”

Ericsson itself is still attempting to make its mark on the PTT carrier
market following a less than successful Unstrung demo last year (see
Ericsson:

Pain-to-Talk?). “We haven’t announced any specific customers but we do
have trials with major operators,” claims Madman. “We have a lot of
trials.” Sigh. Don’t we all?

— Justin Springham, Senior Editor, Europe, Unstrung

http://www.unstrung.com/document.asp?doc_id=50335

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