Push to Talk over Cellular (PoC): Business Opportunities and Challenges

SUMMARY

Overview

After more than a decade having the market to itself, Nextel now has competition for this service from most cellular providers. As a result push-to-talk (PTT) is available to a much wider market, in addition to the services that mobile phone customers demand, all in a mobile phone form factor. All equipment manufacturers have Push-to-Talk over Cellular (PoC) capabilities in their 3G core networks. In the US, thirty-one out of 188 major mobile phone models support PoC capabilities. As of 1Q 2008, only T-Mobile USA does not offer PoC - even though T-Mobile offers PoC in all of its European operations.

Push to Talk over Cellular (PoC): Business Opportunities and Challenges provides critical industry analysis. The main body analyzes the PoC market and value chain, including how services, goods and revenues flow through Equipment Manufacturers, Software Developers, Service Providers, Content Providers, and Customers. Leading stakeholders are profiled and evaluated. The publication includes a technical tutorial with simplified explanations of PoC function and how the industry manages its technical standards.

Sampling of Key Benefits

• Current state of the PoC market in the US and which companies offer PoC service in countries worldwide
• Evaluation of the PTT value chain and ecosystem including how goods, services and revenues flow through the cellular market
• Third-party software and content developers will learn about the almost unlimited opportunities created by IMS and PoC

Key Findings

• Already in 1Q2008, 2% of all customers globally use push-to-talk, representing 64 million users and a minimum 40% annual growth rate
• It's not just push-to-talk any more - the PoC supports multiple simultaneous sessions, multimedia, interactivity, and the ability to switch from PoC to cellular during a call, among other services.
• There is a current scarcity of content to "feed" the new Push to Talk features and 3G/4G bandwidths

Target Audience

• Handset makers and sellers will learn the wide range of services enabled by PoC that offer new market opportunities
• Service providers will learn how IMS - Integrated Multimedia Subsystem (IMS) - enables PoC and many other services at very low incremental cost. They will also learn how critical it is to upgrade their networks to accommodate IMS
• Marketers will learn what kind of services and solutions they can expect in the near to medium-term future, including service providers best apt to provide
• Venture capital firms will learn which investment opportunities are created by the deployment of IMS and PoC
• Readers requiring a better understanding of PPT and PoC specifically will learn some basic facts about the technology that enables IMS and PoC to work, which types of cellular systems support them, and how the industry manages the standards that enable PoC to work across multiple technologies
• All constituents will learn who's doing well and who's not in terms or solutions and service deployment

Companies Discussed in Report

• Nokia
• Motorola
• LG
• Samsung
• Sony Ericsson
• Research in Motion
• Palm
• Sky MobileMedia
• Genaker
• Sonim
• Ericsson
• Alcatel/Lucent
• Nokia/Siemens
• Nortel
• Huawei
• ZTE
• AT&T
• Sprint Nextel
• Verizon
• T-Mobile
• Alltel
• Qualcomm
• Broadcom
• Kodiak

Companies and Organizations Mentioned in Report

• 3GPP
• 3GPP2
• 3 Scandinavia
• 4G Working Group
• Advanced Info Service
• AirTel
• Alaska Communications Systems
• Aloha Partners
• American National Standards
• Institute
• Ancel
• Ardaco
• Areeba
• Avea
• Best Buy
• Bluegrass Cellular
• Boost Mobile
• Bravo
• Bureau of Land Management
• Cable Labs
• Car Toys
• Carolina West Wireless
• Cellco Partnership
• Cellcom
• Cellular Properties (dba Cellular One)
• Cellular South
• Centennial Communications Corp.
• Central Intelligence Agency
• Chunghwa Telecom
• Cincinnati Bell Wireless
• Circuit City
• Claro
• Compal
• CTI Movil
• Cellular Telephone
• Industry Association
• Daimler-Chrysler
• Department of Homeland Security
• Dialog GSM
• Dobson Communications
• DoCoMo Guam
• Earthlink
• East Kentucky Network LLC
• (dba Appalachian Wireless)
• Easterbrook Cellular
• Edge Wireless
• Etisalat
• European Telecommunications
• Standards Institute
• Farmers Wireless
• FasT-mobile
• Federal Bureau of Investigation
• Forbes Magazine
• GCI Communication Corp.
• Geocell
• Helio
• Houzhou Qiauxing
• Hutchison
• Illinois Valley Cellular
• Inland Cellular Telephone Company
• Internet Engineering Task Force
• International Telecommunications
• Union
• KDDI
• Kyiv star GSM
• Kyocera
• Leap Wireless (dba Cricket)
• LetsTalk
• lifeJ
• Marconi
• Maxis Communication
• MegaFon
• MiRS
• mmO2
• Mobile Satellite Ventures
• Mobile Syria (JSC)
• Mobily
• Mobitel
• Mohave Wireless
• Movistar
• MTA Wireless
• MTS Communications
• MTS UKR
• National Telecommunications and
• Information Agency
• Neloco
• New World Mobility
• Nex-Tech Wireless, LLC
• Nii Holdings
• NTELOS
• NTT DoCoMo
• O2
• OMA (Open Mobile Alliance)
• Optimus
• Orange
• Pantech
• Pelephone
• Personal
• Pioneer/Enid Cellular
• Plus GSM
• Polkomtel
• PTK Centertel
• Radio Shack
• Ramcell
• Rural Cellular Corp
• SaskTel Mobility
• Saunalahti
• Secret Service
• ShenZhen
• Silentel
• Sky Microwave
• Smith Bagley
• (dba Cellular One of N.E. AZ)
• SPIRIT DSP
• SouthernLINC Wireless
• Stelera Wireless, L.L.C.
• STK
• Suncom Wireless
• SureWest
• Talk-IP
• Tata Indicom
• Telecom New Zealand
• Telecommunications Industry
• Association
• Telefonica
• Telefonica Moviles Peru
• Telus
• Telus Mobility
• TIM
• T-Link
• TracFone
• Turkcell
• U.S. Cellular
• Ukrtelecom
• Unihero
• Union Telephone Company
• Virgin Mobile
• Vodafone
• Wal-Mart
• Warid Telecom
• Wataniya
• Westlink Communications
• Wirefly
• XPress

TABLE OF CONTENTS

• Tables.
• Figures.
• Abstract

1. Introduction: Push-to-Talk and the Walkie-Talkie.

• 1.1 From Military Origins to Mass Market
• 1.2 Push-To-Talk Over Cellular (PoC)

2. PoC: A Mini Tutorial

• 2.1 SIP Makes PoC Work.

3. The Economics of PoC..

• 3.1 The Future of PoC..
• 3.2 PoC Market Size and Growth.
• 3.3 The PoC Value Chain.
  • 3.3.1 Equipment
  • 3.3.2 Service.
  • 3.3.3 Microeconomics of the Handset
  • 3.3.4 Content

4. Handsets and PoC..

• 4.1 Nokia: Still the Giant
• 4.2 Motorola: The PoC King.
• 4.3 LG: Recovering from a Disastrous Year
• 4.4 Samsung: Korean Product at its Best
• 4.5 Sony Ericsson: Not Interested in the US Market
• 4.6 PoC Handset Market Share.
• 4.7 Profitability of Handsets.
• 4.8 Smartphones.
• 4.9 Research in Motion ("Blackberry"): Smartphone Leader
• 4.10 Palm/PalmOne: Trailing Badly.
• 4.11 The War of the Chips: Broadcom vs. Qualcomm..
• 4.12 Opportunities for Third Parties in the Handset Business.
  • 4.12.1 Sonim: Most Successful
  • 4.12.2 Sky MobileMedia: Up and Coming.
  • 4.12.3 Genaker: Hiding in a Corner
• 4.13 Costs to Handset Manufacturers.
• 4.14 Risks and Benefits to Handset Manufacturers.

5. All 3G Network Equipment Supports PoC..

• 5.1 Ericsson: King of the Hill
• 5.2 Alcatel-Lucent: Growth through Merger
• 5.3 Motorola: It was Our Idea!
• 5.4 Nokia-Siemens: Another Merger Provides Scale.
• 5.5 Nortel: Trailing, As Usual
• 5.6 Huawei: Chinese Upstart Out-Sells Nortel
• 5.7 ZTE: Only Just Begun.
• 5.8 Network Equipment Market Share.
• 5.9 Network Equipment Profitability.
• 5.10 Costs to Equipment Manufacturers.
• 5.11 Risks and Benefits to Equipment Manufacturers.
• 5.12 Opportunities for Third Parties in PoC Network Equipment

6. The Main PoC Service Providers.

• 6.1 Sprint Nextel: Still in Trouble?.
  • 6.1.1 Sprint Nextel: PoC Leader
  • 6.1.2 Will QChat Save Sprint Nextel?.
  • 6.1.3 Skeletons in the Sprint Nextel Closet
  • 6.1.4 iDEN: Narrowband Dead End.
• 6.2 Verizon: Serenity amongst the Turmoil
• 6.3 AT&T/Cingular: Surviving the Merger
• 6.4 T-Mobile: Uh, Where's the PoC?.
• 6.5 Alltel: It's OK to be Small
• 6.6 "Big Five" Operator Market Share.
• 6.7 Operator PoC Share using a Handset Surrogate.
• 6.8 Cellular Service Profitability.
• 6.9 Operator Efficiency.
• 6.10 Customer Satisfaction and Churn.
• 6.11 Figures of Merit: Multiple Dimensions.
• 6.12 The Small US Operators.
• 6.13 Many International Operators offer PoC..
• 6.14 Opportunities for Third Parties in PoC..
• 6.15 Costs to Network Operators.
• 6.16 Risks and Benefits to Operators.

7. Where is this "Content" We've been Hearing About?.

• 7.1 Grinding to a Start
• 7.2 Push To eXperience (PTX)

8. Customer Benefits and Applications.

• 8.1 Commercial Customers.
• 8.2 Government/EMS Customers.
• 8.3 Private Customers.

9. Summary.

10. Tutorial: What You Need To Know About PoC Technology.

• 10.1 First Generation Cellular Technology: Analog 1.0.
• 10.2 Second Generation Cellular Technology: Digital 2.0.
• 10.3 Third Generation Cellular Technology: Digital 2.5 And 3.0.
• 10.4 Fourth Generation Cellular Technology: Real Bandwidth.

11. PoC Protocols.

• 11.1 SIP Makes PoC Work.
• 11.2 The Role of SDP.
• 11.3 The Role of SIMPLE.

12. How the Industry Sets PoC Standards.

• 12.1 IMS.
• 12.2 3Gpp.
• 12.3 3Gpp2.
• 12.4 OMA..
• 12.5 IETF.

13. Proprietary PoC Solutions.

14. Non-3G PoC Standards.

• 14.1 TETRA..
• 14.2 P25.
• 14.3 Other Standards.

15. All Radio Systems are Limited by Coverage.

• 15.1 Out-of-Coverage Use.
• 15.2 Multipath.

16. Signal Delays Unique to PoC..

Tables

• Table 1: Model Share of Major Terminal Manufacturers.
• Table 2: PoC Phones Offered by AT&T.
• Table 3: US Model Share of Major Terminal Manufacturers.
• Table 4: Model Share of Major US Network Operators.
• Table 5: Correlation coefficients among operator figures of merit
• Table 6: Some Possible PTX applications.
• Table 7: Organizations Contributing to IMS (from Cisco)
• Table 8: Comparison of OMA with Proprietary Standards.

Figures

• Figure 1: Full Duplex (A), Half Duplex (B), and Full Duplex via Cellular Network (C)
• Figure 2: Motorola SCR-536 circa 1941.
• Figure 3: "Professional" walkie-talkies.
• Figure 4: "Toy" walkie-talkies, conventional and bizarre.
• Figure 5: PoC is an application - layer service.
• Figure 6: George and Fred on Walkie-Talkies.
• Figure 7: George and Fred on a PoC Call
• Figure 8: The PoC Value Chain.
• Figure 9: Flows of Handsets, Services and Cash.
• Figure 10: Handset market share 2006.
• Figure 11: Handset Manufacturer Profitability.
• Figure 12: Smartphone market share 3Q07.
• Figure 13: Mobile browser market share 2007 (from RoughlyDrafted)
• Figure 14: The Sonim XP-1 Rugged Phone.
• Figure 15: Wireless Network Equipment Market Share.
• Figure 16: Profitability of Network Equipment Manufacturers.
• Figure 17: US "big five" operator market share (in subscribers)
• Figure 18: Network operator profit for big five.
• Figure 19: Revenue per Employee for big five.
• Figure 20: Network Operator Churn Rate.
• Figure 21: Big Five Statistics Compared.
• Figure 22: Market positioning of PoC (from Ericsson)
• Figure 23: Classes of group call (from Nokia)
• Figure 24: 2.5-G and 3-G signal flows, GSM..
• Figure 25: Signal flows in a 3-G CDMA and 4-G network.
• Figure 26: PoC is an application - layer service.
• Figure 27: George and Fred on walkie-talkies.
• Figure 28: George and Fred on a PoC Call
• Figure 29: General PoC Building Blocks.
• Figure 30: PoC architecture.
• Figure 31: Standards bodies Relevant to PoC..
• Figure 32: IMS consolidates functions common to all applications (from Cisco)
• Figure 33: General arrangement of PoC functional blocks.
• Figure 34: Radio coverage in a mountainous region.
• Figure 35: Multipath Reception.