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Push-to-Talk: Nextel Is Still the One to Beat


Nextel (NXTL) Communications is finally getting some respect. The wireless-phone carrier is known for its oddball technology, clunky handsets, and a heavily blue-collar customer base. But mostly it's known for its push-to-talk feature that allows its phones to be used as walkie-talkies. Suddenly, however, everyone wants a piece of the walkie-talkie action.

Verizon (VZ) Wireless is the first competitor to take advantage of technological and regulatory changes that allow other carriers to imitate the Nextel service. In testing both, I found that Verizon's offering is nowhere near as good as Nextel's. But AT&T Wireless (AWE) and Sprint PCS (PCS) are readying their own versions, and my guess is that within a couple of years, good push-to-talk capability will be standard on many wireless phones.

Direct Connect, as Nextel calls its service, is easy to use. To begin a connection, you select a Direct Connect in the phone's contact list and press a button to send an alert. (You also can connect with several people at once, but these groups must be set up for you by Nextel.) You then press and hold a button on the side of the phone to talk. When you release the button, others in the conversation hear a beep indicating that it is O.K. for someone else to talk.

A DIRECT CONNECT CONVERSATION produces a different experience from a regular call. The push-to-talk feature tends to discourage people from rambling. And because you have the floor for as long as you hold down the talk button, there are no interruptions. Direct Connect has made Nextel popular among construction workers, delivery drivers, and others who are used to working with two-way radios. Until recently, push-to-talk worked only within a local service area, but Nextel recently made it available nationwide in a bid to broaden its appeal beyond the blue-collar market. National plans with unlimited Direct Connect start at $60 a month.

Unlike many wireless carriers, Nextel is profitable, with the highest revenue per customer in the business, and it is likely to keep its push-to-talk edge for a while. Other carriers have to emulate the two-way radio service built into Nextel's unique iDEN technology and, as is usually the case, emulation doesn't work as well as the real thing. Verizon's push-to-talk superficially works like Nextel's. But it takes 10 to 15 seconds after you push the button to establish a connection, something Nextel phones do almost instantaneously. More annoying, there's a delay of at least five seconds after you speak before the person on the other end hears what you've said. The result is a painful pause each time one person finishes speaking.

Verizon is selling push-to-talk primarily as a service for all business types. For the time being, at least, it is matching Nextel with a $60-a-month plan, including unlimited push-to-talk. The only phone currently available is a Motorola (MOT) V60p, a slightly smaller but less capable imitation of Motorola's Nextel handsets. Unlike nearly all phones in its $150 price class, it lacks a color display. Oddly, although push-to-talk uses Verizon's advanced data capabilities, the V60p handset offers no data services, such as e-mail -- while Nextel's does. Verizon will offer more capable phones in coming months.

A company called fastmobile offers a sort of do-it-yourself push-to-talk service on GSM networks (including AT&T, Cingular, T-Mobile (DT), and most carriers outside of North America). Its $3.95-a-month "fastchat" service works on some Nokia (NOK) and Sony Ericsson phones, including the popular Nokia 3650. Although it inconveniently uses one of the standard phone buttons instead of a special push-to-talk button on the side, the service works much like Verizon's.

I doubt Verizon's offering will be a big hit in its present form. But it, and other carriers, will approach Nextel's service over time -- and a technology once derided as the essence of blue-collar communications is becoming hip. By Stephen H. Wildstrom


Steve Ballmer, Power Forward
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