The hype around Push to Talk (P2T) is growing ever louder as handset manufacturers being to roll out GSM P2T phones, and operators look to emulate Nextel’s high ARPU and low churn. But, if P2T is going to drive up revenues and margins, reduce churn and attract profitable customers, operators will need to make sure their billing and CRM systems are in place to support the new service. Neil Philpott, director at Amdocs and president of the Global Billing Association reports on how operators can differentiate their services.
Nextel Communications, the pioneer of P2T services and world’s leading provider, has the highest average revenue per user (ARPU ) in North America. Telus of Canada has also launched P2T and Orange has announced the purchase of P2T equipment from Kodiak with the intent to launch service in France and UK later this year. Many other CSPs have announced plans or are making noises about P2T. So what is it all about?
What is Push to Talk?
P2T is communication service that allows direct one-to-one and one-to-many voice communications over a cellular network at the push of a button — hence the name. From the user’s perspective it has many similarities to the classic Walkie-Talkie. It allows you to connect instantly with one or more parties who subscribe to the service and enables you to speak while pushing the ‘Talk’ button. Like the Walkie-Talkie, only one person may speak at a time. The essential difference from the Walkie-Talkie model arises from the fact that the service operates over the mobile CSP’s network. This allows two things. First, the geographic reach of the service greatly exceeds that of Walkie-Talkie, and that’s before the advent of P2T roaming across networks. Second, the user community that can be addressed is far greater, extending as it does to include any of the mobile CSP’s customers who subscribe to the service.
There are 3 major components to the service:
P2T enabled end user device with user interface
Always-on network such as GSM/GPRS, iDEN, etc
P2T core network application servers that run and control the service, e.g. maintains the users’ group lists
To begin a P2T session, a subscriber simply chooses the target individual or talk group; pushes the button to talk, and releases the button when finished. While one person speaks, the others listen. P2T calls are usually connected without the recipient(s) physically answering and they are typically received through the P2T-enabled phone’s loud speaker.
Successfully launching P2T
While still an emerging service, P2T is already promising mass market potential. Behind the scenes a great deal of activity is occurring to assemble offerings that will mitigate any advantages that may be achieved by the first movers. The rapid emergence of P2T services over a cellular infrastructure has bred a number of different approaches and CSP strategies. In the absence of any prevailing industry-sanctioned standards, a number of P2T application vendors have developed proprietary solutions. These range from those specifically designed for data networks such as GRPS and CDMA 1X networks, to those that are engineered for the circuit switch networks. Some mobile CSPs have focused much of their efforts on offering packet based solutions that have been ‘network optimized’ to provide minimal latency.
Although low latency is a very important and necessary attribute of the service, it is unlikely that this market approach on its own will provide a sustainable competitive advantage for the mobile CSP. In addition to ensuring a technically comparable offering, mobile CSPs must look to other aspects of the service that can set their offering apart from the competition. Only then will they motivate consumers to adopt the newly launched P2T service. With the heavily invested 2.5G and 3G networks there are opportunities to offer a host of multimedia and messaging services that span multiple devices and multiple networks, from a PC user on a high speed internet connection to a mobile subscriber on a GPRS network. The ability of the mobile CSP to provide this integrated service approach will be key aspect of establishing a more differentiated market presence for their P2T offering.
Business support systems
A critical aspect of rolling out P2T services is to consider how the service will be handled from a business support system’s perspective. Having a system that is flexible enough to adapt to these new services is crucial for time to market success. Providers of billing and CRM products and services have had to accommodate several unique aspects of the P2T service in their systems.
For instance the definition of the subscriber changed in the P2T environment. New resources needed to be accounted for that identify a subscriber as part of a region, a fleet and various talk groups. These definitions of the customer need to be managed and correlated to the ‘billed’ account and have a direct impact on how the service is charged and on the level of discounts applied.
In addition, there are a number of other considerations for provisioning, mediation and rating. Although currently most of the service plans are billed on a flat rate basis within an allotted airtime threshold, there is potential for more sophisticated rating models in the future. Options include time based usage and talk-burst size charging. They can operate on a pooled usage model where the call originator pays for all participants, or a shared usage model where each participant pays for their respective portions of the call. The ability to handle such scenarios is contingent on the billing system’s ability to model such plans as well as collect, correlate and guide the multiple call records to the appropriate participating subscriber’s billing accounts.
P2T service bundling?
In addition to the core functionality required to support P2T, mobile CSPs must also look for ways to ensure the market success of their P2T services. By providing enticements, mobile CSPs can successfully drive adoption rates while at the same time making their offering stand out from the competition.
Simply offering an undifferentiated service will make it very difficult to penetrate the new market segments and will make it very difficult to encourage users to switch from such incumbents as Nextel. For instance, to help drive adoption rates mobile CSPs could offer discounts on P2T based on exceeding usage levels on another service. This type of ‘service bundling’ might include a package such as: spend $10 on P2T and receive a 10% discount on excess airtime.
Mobile CSPs should also consider combining current services with P2T to maximise revenue potential. For instance combining voicemail with P2T so that, if a targeted P2T participant is unavailable for a call then the call originator could drop a voice message into their mailbox, allowing the CSP to capture revenue both for the call and for the call by the voice mailbox owner to retrieve their message.
Providing the appropriate incentives for targeted user segments will also be required to drive the uptake of P2T services. For corporate users, hierarchy based discounts could be provided where an employer could subsidise an employee’s recurring monthly P2T charge, while employees contribute their usage back to the employer for the purposes of contributing to the overall corporate discount.
Lastly, offering flexible payment options will help create a greater propensity to spend on such services as P2T. Although prepaid in a P2T environment has some inherent complexities and implications for authorisation and call latency, mobile CSPs should consider offering this as an option to create an atmosphere for adoption; especially in Europe where prepaid is a prominent method of payment.
Will it succeed?
Will Push to Talk become the market success that many industry insiders are projecting? Voice communication, even short burst mode type of communication as in P2T, is richer and more effective than text messaging and e-mail. Mobility has advantages over Instant Messaging from a desk top PC. Access at the push of a button, multiple party communication and a lower price point is preferable to dial-up mobile voice service in a lot of situations. And in many cases extended geographic coverage beyond the range of a VoIP session on a wireless hot spot is required. So it would seem that early successes may be read as an indication of a potentially successful market.
However, for P2T to reach its full potential there needs to be a standard network approach and the ability of the service to span across multiple carrier networks; in other words, interoperability. In addition, mobile CSPs need to make sure that they don’t merely launch a “me too” service that fails to differentiate or provide the necessary enticements for market adoption. The business support systems are the key to achieving this goal and mobile CSPs should work to ensure that this does not become the inhibiting factor in their success.
As the saying goes, the proof of the pudding is in the eating. Early US success has come from the small and medium business customer market segment. Will it follow the same pattern in Europe or will it appeal to other market segments — perhaps the youth market as a substitute for some of the peer-to-peer text messaging and PC-based instant messaging services? Whatever it may be one thing is clear, P2T is coming to a handset near you. Will you be pushing the button?