PTT: The New SMS?
PTT allows people to use their phones as a walkie-talkie, merely pushing a button to talk to another user or group of users. The technology is arguably the voice equivalent of SMS, the text messaging technology that enables users to send or receive notes of up to 160 characters in length on their phone.
PTT has already experienced significant success in the U.S., with Nextel Communications Inc. (Nasdaq: NXTL) claiming to generate around 20 percent of its revenue from the technology. AT&T Wireless Services Inc. (NYSE: AWE), Sprint PCS (NYSE: PCS)), Verizon Wireless and others are also working on delivering similar voice-over-IP based services (see Verizon Mum on Push-to-Talk).
With the U.S. market established, network vendors and industry startups are now targeting European carriers with PTT offerings in an attempt to encourage a consumer messaging boom similar to the unexpected success of SMS (see Big Three Talk PTT and Radiolinja Trials Push-to-Talk).
According to Forrester Research Inc., 156 million SMS messages are sent in Europe every month, generating revenues of €19.6 billion ($23 billion).
"The mobile world has been racking its brains to find something that will succeed on the scale of SMS," comments James Tagg, managing director of push-to-talk startup FastMobile Inc.. "[PTT] will take off like SMS did. Our estimates suggest that push-to-talk could be worth €150 million ($173 million) in Europe over the next year, becoming a multi-billion-euro market in a few years." [Ed. note: Well, he would say that, wouldn't he?]
Despite Tagg’s drum-banging, European carriers remain skeptical about the long-term benefits of investing in the technology. Few regional trials have been announced, and local analysts seem reluctant to take the service too seriously.
"There isn’t much evidence of PTT’s success in Europe at the moment," says Ovum Ltd.'s principal analyst, Jeremy Green. "It is more of a toy and an interesting niche people will fool around with, rather than the next SMS. It won't be a big earner like text messaging. I don’t believe it is a very big opportunity."
U.S. analysts beg to differ, arguing that it is only a matter of time before PTT becomes a hit with European users. "I find it strange that we haven’t seen that much interest in Europe, as it is a very attractive product," says Ken Hyers, senior analyst at In-Stat/MDR. "Clearly, the strengths of the technology will have to be explained to customers, but people aren’t stupid. They quickly realized that SMS is a useful technology, and I don’t see any reason why they wouldn’t see the advantages of PTT as well."
Hyers adds that the walkie-talkie-style service will appeal to the same segments of the population that SMS initially attracted. "There's certainly no way corporate executives and vice presidents will be using it, but there is a similarity in user demand between the two technologies."
— Justin Springham, Senior Editor, Europe, Unstrung