Nortel Pushes Quietly

Nortel Networks Ltd. (NYSE/Toronto: NT) is keeping a low profile over the launch of its push-to-talk (PTT) technology for carriers, quietly teaming with software startup Togabi Technologies Inc. and IT giant Hewlett-Packard Co. (NYSE: HPQ).

The Canadian vendor is the last major incumbent supplier to publicly announce plans for PTT -- technology that allows people to use their phones as walkie-talkies, merely pushing a button to talk to another user or group of users.

Last August, Nokia Corp. (NYSE: NOK), LM Ericsson (Nasdaq: ERICY), Siemens AG (NYSE: SI; Frankfurt: SIE), and Motorola Inc. (NYSE: MOT) announced the completion of a “jointly developed” PTT over Cellular (POC) specification, designed to enable interoperability among carriers and handset vendors. The companies submitted this specification to the Open Mobile Alliance (OMA) standards body in an effort to promote it as the de facto standard for POC (see Giants Complete PTT Spec).

Nokia later reneged on this agreement, announcing plans to push its own pre-standard protocol, leaving the remaining trio to test their own version (see Nokia Pushes Off and Vendors Test PTT).

Gallic giant Alcatel SA (NYSE: ALA; Paris: CGEP:PA) last month adopted Nokia’s approach with its decision to launch a pre-standard PTT service; and Lucent Technologies Inc. (NYSE: LU) has teamed with startup Kodiak Networks to develop kit for CDMA 2000 carriers (see Alcatel Pushes Alone and Kodiak Teams With Lucent).

According to Nortel’s Eric Bezille, senior manager for GSM, GPRS, and EDGE business development, the company has begun trials with its own pre-standard PTT kit and already claims an unannounced customer win.

“Our software solution is supplied by Togabi and it runs over an HP platform,” says Bezille. “We are supporting the OMA and making a significant contribution to the standard. We will be supportive of the standard once it is ratified.”

Analysts argue the HP/Togabi partnership is a good fit for Nortel in light of its lack of presence in the handset market. “Supplying an HP/Togabi POC solution gives Nortel’s customers access to high-performance, embedded handsets from Samsung and Kyocera, as well as a very functional POC server,” comments Current Analysis’s Ken Rehbehn (see Samsung, Togabi Team).

Rehbehn is concerned, however, that Nortel’s absence from earlier vendor testing may backfire in the long run. “The danger for Nortel is that HP/Togabi is not engaged in early interoperability tests with other pre-standard POC vendors, and operators may face a rocky road when they attempt to mix and match handsets from Sony Ericsson, Motorola, and Siemens.”

PTT services have already experienced success in the U.S., with Nextel Communications Inc. (Nasdaq: NXTL) claiming to generate around 20 percent of its revenue from its Motorola-supplied technology (see Nextel's Nationwide Walkie-Talkie). Last August Verizon Wireless launched a similar offering (see Verizon Pushes-to-Talk, Finally ).

Such success has seen the technology touted by some as the wireless industry’s revenue savior, with European carriers preparing to roll out PTT-type services later this year (see Orange Pushes Startup, MMO2 Joins PTT Gang, and Europe Catches PTT Bug).

“The wave of carrier interest generated across the world has been surprising, maybe a couple of quarters earlier than we initially thought,” confirms Bezille. “Interest is growing in Europe and Asia... Network vendors are driving the market.”

— Justin Springham, Senior Editor, Europe, Unstrung