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AT&T Pushes Nokia?

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LR Mobile News Analysis
Light Reading
5/28/2004

AT&T Wireless Services Inc. (NYSE: AWE) is rumored to have reneged on an agreement with Finland’s Nokia Corp. (NYSE: NOK) to deploy its push-to-talk over cellular (POC) kit, at a time when the carrier’s future owner, Cingular Wireless, has hinted it would prefer to further relations with U.S.-based network suppliers.

In a conference call with analysts last month, AT&T Wireless announced it was to delay the nationwide launch of PTT-type services.

An anonymous source tells Unstrung that Nokia was due to provide the infrastructure: “Nokia had a pre-contract with AT&T Wireless for its ‘slightly proprietary’ POC solution, but Cingular vetoed it, with assistance from Qualcomm.”

AT&T spokesman Mark Siegel won’t confirm that Nokia was the initial vendor, but admits that the Cingular acquisition is responsible for the change in plan. “The merger has caused us to look at anything with a longer-term nature. For the time being, we will continue to look at PTT, but have no immediate plans to deploy. It has everything to do with the merger.” (See Cingular Buys AT&T Wireless.)

Nokia declined to comment. A recent report from Kaupthing Equity Research states, however, that “the U.S. market is the single most important target in Nokia Networks’ PoC strategy, and Cingular/AT&T Wireless is the primary target.”

A decision to drop Nokia certainly strengthens belief that Cingular would rather work with domestic vendors. Earlier this week the carrier’s president and CEO, Stan Sigman, stated that Cingular’s vendors must “support us right here in the U.S... not from some timezone halfway across the world. Our vendors must be close to us and react quickly to our needs.” (See Lucent Flagged for Cingular 3G.)

Cingular and Qualcomm were unable to return calls by press time.

Push-to-talk technology allows people to use their phones as walkie-talkies, merely pushing a button to talk to another user or group of users. It's extremely exciting.

— Justin Springham, Senior Editor, Europe, Unstrung

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