Cingular Wireless on Monday will launch a push-to-talk cell phone service, becoming the latest company to challenge Nextel's walkie-talkie-like technology.
To date, no national carrier has successfully copied Nextel's trademark feature, which has built a business-customer following over more than a decade and helped the company reap some of the industry's biggest profits.
Cingular will attempt to break into the market with two new models of phones with buttons on the side that connect users to other Cingular walkie-talkie customers. The version will be marketed primarily to families and individual consumers because Cingular recognizes that Nextel has a base of business customers who already use the service, said Carlton Hill, executive director of new voice products for Cingular Wireless LLC.
Walkie-talkie service is popular because it doesn't require 10-digit dialing. It's possible to talk to an entire group at the same time -- a kid can walkie-talkie mom, dad and big sister all at once -- and its limitless-calling feature makes it popular for people who don't want to eat up cellular minutes.
Two years ago, Verizon Wireless LLC tried to carve out a slice of the market, as did Sprint Corp. But both of their technologies took longer than Nextel's to connect a call, and they failed to gain popularity. Both have all but halted their marketing and are plotting to relaunch new and improved products. (Sprint and Nextel have since merged, and Sprint Nextel Corp. is headquartered in Reston.)
"They haven't been successful because they haven't built a product that really works," said Andy Seybold, president of Outlook 4Mobility, a consulting and research firm. Cingular's service takes longer than Nextel's to set up initially, but once the connection is made, it offers clearer sound than Nextel's, he said. Cingular is likely to eat into Nextel's customer base, he said. "There are a lot of people who are fed up with Nextel, and Nextel was the only game in town," Seybold said.
Cingular's service, which costs an extra $9.99 a month for unlimited usage of the push-to-talk feature, comes with features not offered by Nextel, such as the ability to see whether someone is online or wishes to be contacted. But setting up the call can take about 15 seconds, or about as long as it takes to dial through on a normal call. Nextel uses a different technology that's designed for walkie-talkie communications, so its setup and transmission times are shorter.
"We've been offering Nextel walkie-talkie service for 13 years; it would take a long time for any competitor to catch up," said Lisa Malloy, a spokeswoman for Sprint Nextel. "We have the experience, more than 20 handsets and 17 million customers that use that service."