Vendors Push Carrier Upgrades

CANNES, France -- 3GSM Congress -- The GSM/GPRS push-to-talk (PTT) standard that LM Ericsson (Nasdaq: ERICY), Nokia Corp. (NYSE: NOK), and Siemens Information and Communications Networks Inc. announced they were developing yesterday may have the additional benefit -- for these vendors -- of encouraging U.S. GSM operators to make major software upgrades to their networks' IP cores.

IP-based push-to-talk services have already proven to be very popular with business people who regularly work off-site, construction workers, and emergency services personnel, among others.

PTT adds a walkie talkie kind of a capability to wireless handsets, allowing such users to have back-and-forth conversations without actually having to place or pick up a call [ed. note: Over.]

The proposed standard for the voice-over-IP technology will require operators to update their networks to comply with the core network technical specification laid out in Release 5 from the 3rd Generation Partnership Project (3GPP).

The Release 5 document was completed last August. The spec is intended to define a standard IP core for GPRS networks and beyond, which would help to pave the way for more sophisticated, and interoperable, data services on such networks. However, analysts and vendors that we spoke to at the show all agreed: No operator has yet implemented the full specification.

The equipment vendors hope that by promising the carriers a services carrot, they will finally grasp the upgrade stick. Nokia made the link clear today at the press conference for the launch of its IP multimedia core product.

"[Push-to-talk] is not a Nokia proprietary development. There will be an open standard for this, allowing one-to-one and one-to-many conversations using voice over IP," says Dr. J.T. Bergqvist, Nokia senior VP and GM of IP mobility networks. "This is the result of work on IP platforms we have been doing since 1997 and is the first step towards full IP service capabilities." To this end, Nokia and friends are developing a PTT standard that will use the IP multimedia subsystem (IMS) mandated in Release 5. The IMS uses SIP (Session Initiation Protocol) to establish IP connections between terminals. Voice is then converted into data packets and sent over that connection.

An Ericsson spokesman agrees the PTT system will require operators to upgrade their networks: "It is primarily a software add-on to the core network." He adds that some carriers may need to add hardware to their networks as well.

According to Gabriel Brown, Unstrung's research analyst, describing the IP multimedia subsystem upgrade as an "add-on" is understating the task at hand just a little. "It’s a major undertaking," he says. "Definitely a non-trivial upgrade, as they say."

The standards initiative is getting lukewarm support among U.S. GSM/GPRS carriers AT&T Wireless Services Inc. (NYSE: AWE) and Cingular Wireless. Stateside operators are anxious to offer the version of two-way voice service that has proved so successful for Nextel Communications Inc. (Nasdaq: NXTL) (see Nextel's Nationwide Walkie-Talkie for the facts and figures). AT&T Wireless says it will likely need to implement a software upgrade to its core network to use the system being developed by Ericsson et al. However, a spokesperson for the operator gave the vendors' standards push a resounding one and a half cheers.

"We think Nokia's solution is moving in the right direction and will meet the needs of most of our customers," the AT&T Wireless spokesperson tells us. "But, as you know, technology changes quickly, so we need to keep an open mind if something else becomes available from Nokia or other vendors." The spokesperson says AT&T anticipates testing the standards-based system this year but can give no firm date on commercial availability.

— Dan Jones, Senior Editor, Unstrung

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