In the space of a six-month period spanning August 2003 to January 2004, no fewer than three U.S. carriers — Verizon Wireless, Sprint and Alltel — premiered push-to-talk services, transforming an enterprise-focused P2T market that was previously the sole province of industry standard-bearer Nextel into a fiercely competitive environment poised for explosive growth into the consumer sector.

That's how events were supposed to play out, at least. But circa mid-2005, much in the P2T arena is unchanged. Nextel's Direct Connect service is still, by some distance, the market leader, and while the enterprise remains enamored with the possibilities of push-to-talk, its consumer counterpart has, for the most part, failed to follow suit. According to the Yankee Group, at the end of 2004, Verizon, Sprint and Alltel combined for about 1 million total P2T subscribers in all — a minimal take-up rate given that their cumulative subscriber base exceeds 75 million. Moreover, critics complained that these fledgling P2T services suffered latency issues, consistently failing to match the voice quality and setup time of Nextel's service.

So instead of assuming the killer app mantle many predicted was its future, the U.S. push-to-talk market now finds itself at a crossroads. On the one hand, the fate of Sprint's P2T service is shrouded in doubt as a result of the carrier's pending merger with Nextel, while Verizon is quietly relaunching its P2T service, cutting prices in half but also slashing enhanced features like presence and availability. On the other hand, Nextel's customer base grew from 13.3 million in 2003 to 16.2 million in 2004, and in late March 2005, Alltel announced the expansion of its P2T service across its entire nationwide network, creating a footprint larger than Nextel's in the process.

Both wireless carriers and P2T vendors suggest that the application is still finding its footing as it slowly but surely penetrates the consumer sector. Supporters cite as proof the success of Nextel's youth-targeted Boost Mobile subsidiary, which topped the 1 million-subscriber threshold in 2004 — according to Boost, more than 50% of its customer minutes are now spent on its Chirp P2T service.

“Two years ago, folks were desperate for an answer to Nextel, then shot themselves in the foot by going out too early,” said Bob Plaschke, CEO of voice services solutions provider Sonim. “But carriers are still committed to push-to-talk as a horizontal communication service, and they're committed because of strong demand from enterprise customers and emerging demand from youth subscribers.”

There is no arguing that Nextel is still the name to beat in push-to-talk. As rival carriers launched their P2T initiatives, Nextel went on the offensive, introducing an international version of its Direct Connect service, enabling walkie-talkie connections between the U.S. and Argentina, Brazil, Canada, Mexico and Peru that's proven particularly popular with Latino consumers. In addition, the carrier debuted enhanced features like NextMail (which allows users to send streaming MP3 voice messages from their handsets to any e-mail recipient) along with new handsets.

“We've done a lot to drive [push-to-talk] in the last 12 months, but I'm not sure I can say the same thing for the rest of the U.S. market,” said Greg Santoro, vice president of products and services at Nextel. “Clearly, there's been some additional handsets that have come out that support push-to-talk, but other than that, I haven't seen much activity at all.”

Since Nextel first introduced push-to-talk service in September 1996, the application has enjoyed its greatest acceptance within enterprise circles, and the carrier has no plans to turn its back on that segment now.

“There's still a lot of potential in the business marketplace,” Santoro said. “We focus on blue-collar, grey-collar, fleet-field services and public safety, and if you look at the size of those segments, they make up a considerable portion of the work force population, and we feel there is still a lot of opportunity to penetrate those segments. We've also generated excitement in the consumer market through the nationwide rollout of our Boost product, which has clearly positioned push-to-talk for the youth and urban markets.”

Indeed, Boost Mobile has emerged as the poster child for how to sell P2T to the mass market. Launched on the Nextel network in the fall of 2002, just months after rival mobile virtual network operator (MVNO) Virgin Mobile USA, Boost courted the youth demographic by advertising its prepaid service in skateboarder and surfer magazines, an approach that contrasted sharply with Nextel's business-focused strategy. The opposing dynamics nevertheless clicked, and in May 2003, Nextel acquired 66% of Boost for an undisclosed amount. Today Boost operates in 12 major U.S. markets, distinguishing itself from rival MVNOs in part by making P2T available on all of its handsets, offering subscribers all-you-can-eat walkie-talkie service for $1.50 per day.

“Boost made a spectacular entry into the consumer market,” said Bruce Lawler, co-founder and vice president of business development with advanced voice services developer Kodiak Networks. “It's still a very ripe market — push-to-talk hasn't been as popular outside the enterprise because Nextel on average charges $20 more a month for P2T, and to the consumer segment, that's a lot of money. But with Boost, they've targeted the youth market with a different pricing plan, and it's worked quite well.”

According to a recent In-Stat study, the subscriber base for P2T in the U.S. will double to 33.6 million by 2009. Many of those new subscribers will fall between the ages of 10 and 18, In-Stat said.

“Boost has the fastest [P2T] growth rate of any brand, in part because they started from zero, but they're now over a million subscribers, and they're getting tremendous ARPU from teens,” Sonim's Plaschke said. “In that is evidence of what we're seeing outside the U.S. In North America, Nextel's defined push-to-talk, but outside the U.S., there have been dozens of push-to-talk launches, and about half of them were focused on teens and the idea of voice chat — that this is IM for your phone. It's my belief that teens act the same way independent of culture, and that over time U.S. carriers will transition to the teen market as well.”

Perhaps the greatest challenge facing push-to-talk is the continuing absence of interoperability between rival operators' P2T systems, which results in a dearth of P2T-enabled handsets and severely limits customer use. That's what makes technological advances like IP multimedia subsystem (IMS, a SIP-based multimedia architecture that provides signaling services for 3G applications) and Push-to-Talk Over Cellular (POC, an open standard that uses voice-over-IP technology to stream voice over data networks) so critical to P2T's future.

Put simply, IMS solutions will enable compatibility for standards-based push-to-talk services between a range of devices from different vendors, which promises to expand the customer base for operators planning to deliver proprietary P2T solutions and offer subscribers a more seamless experience.

“IMS has the potential to allow applications like push-to-talk to interoperate with the Internet, and that does open up the possibility of a lot of new services,” Nextel's Santoro said. “It's a great concept, but it's going to take quite some time for the evolution of that architecture to permeate across all the carriers. You're seeing elements of it slowly adopted into networks today, but it's going to take quite some time for IMS to gain a full foothold with carriers, and to have the service integration that is one of the promises of that architecture.”

Still, some developers are already announcing IMS-based solutions. In March, Kodiak premiered its new Real-Time Exchange (RTX) system with integrated POC and IMS capability, promising delivery of P2T and other advanced voice applications like its branded Instant Calling (P2T calling with contacts and groups) and Voice Bridge (instant group conferencing) services over 2G GSM and CDMA networks as well as 3G UMTS networks. According to Lawler, Kodiak's RTX system will also enable calls initiated on P2T-compatible handsets to connect with any other wireless or wireline user, regardless of their carrier or handset.

“The promise of IMS is ubiquitous communications, and we want to bring that same kind of ubiquity to our solution,” Lawler said. “With features like presence and availability and conferencing, we're showing customers you can have IMS today, even while the standards are being defined and the architectures are being built.”

Some onlookers question whether P2T will ever go truly mainstream in the U.S. unless Cingular Wireless — the nation's largest wireless operator, with a subscriber base in excess of 50 million — decides to launch its own push-to-talk service. T-Mobile has thus far been the other holdout among national carriers.

“By around 2006, I think you'll see Cingular and T-Mobile respond,” Plaschke predicted. “But T-Mobile has always maintained this is a business application, not a consumer application, and until there's clear evidence this a consumer trend, they're not going to go after it.”

And therein lies the chicken-and-egg conundrum now facing push-to-talk: it may not become a consumer phenomenon until it's available on all the nationwide carriers' decks, but some carriers seem opposed to launching P2T until its mass-market appeal is cemented. But most believe that P2T will catch fire sooner or later.

“We own pretty much the entire market today, but projections imply there's going to be massive adoption by all of the carriers pretty quickly,” Santoro said. “So far, that hasn't happened, primarily because the services launched weren't very effective. It's going to take some time to get high-performance push-to-talk to work seamlessly within carriers' networks, but it will happen at some point — and then you will see adoption of push-to-talk much more broadly than you see it today.”

P2T pricing plans