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Sprint Launches 'Push-to-Talk' Wireless Service to Compete with Nextel

Posted on: Monday, 17 November 2003, 06:00 CST

Nov. 17--Competition in the already strong market for "push to talk" wireless services that let consumers use their cellphones like walkie-talkies will be heating up this week, as Sprint PCS joins Verizon Wireless in offering a new service taking aim at Nextel Communications' dominance with its DirectConnect service.

Sprint's planned rollout today of its service, called Ready Link, is just the latest example of a host of services and price promotions being launched by wireless carriers in advance of next Monday's deadline for a new federal policy letting subscribers keep their current phone number when they switch to a new carrier.

The "number portability" change mandated by the Federal Communications Commission is widely expected to uncork a wave of switching by disgruntled consumers who have stuck with a carrier they don't like only because of the hassle of having to get and publicize a new phone number.

Under heightened pressure to keep and attract subscribers, carriers have been rolling out innovations such as Sprint's walkie-talkie offering, T-Mobile's new plans with unlimited free weekend calls starting Thursday nights, and AT&T Wireless's $50 monthly "family plan" offering 600 minutes shared by two phones with 1,000 cellphone-to-cellphone minutes.

Sprint, Cingular, and T-Mobile, the smallest of the six national carriers, are widely cited as carriers especially vulnerable to losing customers because of subpar network reliability for voice calls.

Most industry analysts, including Andrew Cole of Boston-based Adventis and Christopher J. Foster of Technology Business Research in Hampton, N.H., predict Verizon Wireless -- already the largest US carrier with nearly 24 percent of the nation's 151 million cellphone owners -- and Nextel could be big winners. They see customers being attracted by Verizon's reputation for good coverage and Nextel's strong appeal among business users. AT&T Wireless is usually predicted to be neither a big net winner nor loser.

In a hypercompetitive industry that has struggled to offer compelling, different services, Nextel has drawn particular envy from rivals who see its 10-year-old DirectConnect walkie-talkie service as a key reason Nextel consistently posts the highest revenues per customer and lowest monthly subscriber turnover.

Now expanded nationwide, DirectConnect lets people use their Nextel phones to have instant, private walkie-talkie conversations with the 12.3 million Nextel users.

In August, Verizon became the first carrier to offer a competing push-to-talk service, which it says has attracted over 100,000 customers as of the end of September. Like Nextel, however, the service only works with fellow subscribers of Verizon.

Sprint today is rolling out a service called "Ready Link" that costs an extra $15 a month on most regular calling plans, or $5 when subscribers also buy its wireless data service package called PCS Vision for $15.

Ready Link will require customers to buy one of two special color-screen Sanyo phone models that cost $149 with a two-year contract, or $300 without a long-term service commitment. A phone that supports Ready Link and includes a digital camera will go on sale later this year, said Jason Guesman, Sprint director of business marketing.

The lowest-priced plans with unlimited walkie-talkie time cost $60 at Nextel and Verizon, both with 400 minutes of conventional calls monthly.

Sprint's service, in contrast, will be available on plans as low as $35 with 300 peak calling minutes and unlimited night and weekend calls, Guesman said, or $50 total with the $15 Ready Link fee included.

Guesman acknowledged that Sprint will not be able to offer the same nearly instantaneous initial setup of walkie-talkie conversations as Nextel, but said it should take only three to four seconds and prove faster than Verizon.

"It's not so much for us about our competing with their DirectConnect head to head," Guesman said. "Now we're adding two-way radio features to our unique line of phones and services."

Guesman said Sprint, which last week also rolled out a full-motion television service for PCS Vision phones with sports and cartoon channels and MSNBC, wasn't timing the availability of Ready Link specifically because "number portability" takes effect next week. "I'd call it good timing, but it's only one reason. We are constantly rolling out innovative new products and services," Guesman said.

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