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Walkie-talkies provide inspiration for new 'instant' services but adoption in China could be difficult

A mobile phone is just not the same as a good old walkie-talkie. Just ask any taxi driver, policeman, special-forces operative or schoolboy club officer - who wants to fiddle about dialling and waiting for the other party to answer when you can just press a button and talk instantly?

Enter push-to-talk services, which allow users to 'radio' their contacts at the press of a button on their mobile phone. The facility has proved  a hit in the United States, where Nextel Communications has amassed 12 million push-to-talk customers.

The mobile carrier, which unveiled push-to-talk services a decade ago using Motorola technology, had the highest average revenue per user and lowest churn rate among US operators in the first quarter.

Analysts give push-to-talk the credit.

A US study last year  by market research company Zelos Group found 45 per cent of 1,300 non-Nextel mobile customers wanted push-to-talk, making it the second-most desired mobile service after built-in digital cameras.

Low-priced walkie-talkies with limited range are selling in Hong Kong and China, especially among the school-going crowd.

China's mobile operators have taken note and are testing push-to-talk services to see if they can squeeze more value from existing networks with little additional investment.

Some market watchers believe push-to-talk technology could fundamentally reshape mobile communications as users - particularly young people - built instant-messenger-style lists to keep in touch with walkie-talkie-enabled phones.

'It's a very compelling application,' Gartner Group analyst Nick Ingelbrecht said. 'It could become a common feature of an operator's service portfolio. When that's going to be is an open question.'

No1 player China Mobile began trials in Beijing and Guangdong, Hunan and Sichuan provinces in the third quarter of last year. Meanwhile, No2 China Unicom is testing services in Guangdong, Zhejiang and Shandong,  and is reportedly considering a commercial launch this month.

In Hong Kong, Sunday Communications is building push-to-talk capability into its third-generation (3G) network while CSL has also looked into the service.

But whether walkie-talkie services will catch on outside the US remains to be seen.

'It's too soon to talk about whether to launch the service or not,' a China Mobile spokesman said. 'We're still running trials and do not yet know how much additional investment we'll need to put in and what benefits we can gain.'

An analyst who recently met China Mobile representatives said the carrier did not appear optimistic. 'They think it's a niche product that only had a lot of success in the US,' she said.

Unicom, which has been more aggressive as it has under-utilised capacity on its CDMA network, is working with Motorola on push-to-talk. Chairman Wang Jianzhou demonstrated the services last month and hoped the value-added business would generate additional revenue.

One attraction of push-to-talk is cheap voice contact but in China tariffs are already low thanks to intense competition. 'I think it works better for places where tariffs are quite high,' the analyst said.

Nokia's technology marketing manager in China, Jun Zhu, disagreed, noting the mainland had yet to adopt 'calling party pays'.  'Mobile subscribers are still very concerned about tariffs,' he said.

Another issue is pricing. In the US, push-to-talk is marketed as a premium service, giving operators up to US$30 a month on top of a customer's normal bill. Extracting significant extra fees from mainland consumers may be difficult.

The target market for push-to-talk is users of traditional two-way radios, such as workers in the transport and logistics, construction and security industries. The hope, however, is for a mass-market following. Push-to-talk allows customers to form 'buddy lists' similar to online instant messaging.

'It's a service concept that youth are familiar with,' Sunday Communications managing director Bruce Hicks said. 'You know which of your buddies are online and you have instant messaging and response capability ... the whole idea of visual management of communicating - it's pretty interesting.'

Sunday  would be able to offer push-to-talk over its 3G network but Mr Hicks was unsure whether the services would find a following.

CSL chief executive Hubert Ng Ching-wah was also hesitant.  The firm was waiting for more handsets to become available and a battle over  standards to be resolved.

Norson Telecom Consulting said the lack of handsets and the standards battle  would inhibit  push-to-talk on the mainland.

Analyst Yi Gu expects the issues to be resolved by 2006, when the number of mainland users is expected to reach five million, rising to 20 million by 2008.



Mobile firms go back to future