Service Diffusion Strategies for Push to Talk Over Cellular

Service Diffusion Strategies for Push to Talk Over Cellular Timo Ali-Vehmas Helsinki University of Technology Networking Laboratory FINLAND [email protected]

Abstract Traditional Push To Talk (PTT) service has been available for decades but only recently new Internet Protocol (IP) based specifications for Push to talk over Cellular (PoC) utilizing legacy cellular packet data bearers have been introduced. Lead market implementation of PoC is already ongoing but the commercialization process still includes many technical and market risks. The PoC technology has a potential to create new mobile service evolution path starting from voice and extending later on to other group applications. This paper discusses strategic actions related to standardization, system architecture, vendors’ product strategies, substitutes, regulation and service provision in order to advance service diffusion of PoC.

1. Introduction Mobile multimedia has been widely thought to be the source of new service revenue by which the benefits of high-speed mobile data network investments can be realized. Experiences related to WAP, MMS and mobile gaming applications have however showed that mobile data service diffusion is a complex process that contains remarkable technical and market uncertainty. That is why a combined techno-economic management approach has to be adopted in order to achieve successful service diffusion. Push to Talk has its roots in military radios. During the last 60 years, PTT has been the most widely used paradigm of two-way and multiparty radio communication. The PTT user paradigm is still common in military and other professional radio systems (e.g. Terrestrial Trunked Radio, TETRA). PTT is also broadly used in private networks such as coastal naval radio for leisure boating or in Nordic deer hunting parties (VHF radios).

Sakari Luukkainen Helsinki University of Technology Telecommunications Software and Multimedia Laboratory FINLAND [email protected]

Similar use cases have been addressed by two variants of public cellular radio systems, namely GSMR Radio system for European Railways Union (UIC) and proprietary radio system iDEN (Integrated Enhanced Digital Network). Push to talk over Cellular service platform introduces the next wave of technology for group communication. The main difference between PoC and earlier PTT systems is that PoC is utilizing a digital packet radio and IP technologies instead of circuit switched transmission. This novel approach makes it possible for PoC to evolve from a dedicated system to a standard service on any cellular network and in the best case it provides a way forward for IP based multimedia services to inter-work globally, regardless of the access network standard. For the end-user PoC is a new way to communicate with extended support for various social groups and their interaction.

2. Theoretical Background The success of a new technology or service has never been easy to predict. Some of the recent innovation theories are however able to contribute many relevant aspects. The PoC concept can be considered as a radical or disruptive innovation because it contains both a new technology as well as features that are targeted to latent communications needs. The seminal theoretical findings relate to the process identification of how technological discontinuities initiate new technology cycles. These cycles start with an era of ferment, when emerging technological variants and their substitutes seek for market acceptance. This phase is confusing and costly to all players in the value chain before market selects a dominant design [1]. A framework for understanding different network management structures and their connections to the market development has been introduced by applying a real options approach. These results by Gaynor imply to

the use of distributed architecture in the introduction phase of new communications platform when the market uncertainty is high [2]. This enables early phase experimentation with different kind of applications in order to get a good market match between service features and user needs, which tend to develop hierarchically from basic features to more sophisticated ones as users became more educated about the possibilities the new technology provides [3]. Centralized management structure should then be used in later phases of the cycle when the technology and market is mature and the risk level is low. Real options theory suggests further to favor, highly modularized standards that increase flexibility to adapt uncertain market needs by providing a larger field of options, from which to select [4, 5]. A good example of modularized standard is the success of TCP/IP protocol stack. The standards in general enhance compatibility and interoperability, making the benefits of network effect larger and thus expanding the whole market. Globally accepted standards reduce the technology risk faced by the operators because they can be less concerned about lock-in into one supplier. Because standards reduce switching costs, the competition shifts from early fights towards later market share battle, which further on indicates lower prices—but less differentiation possibilities with new features. Standards change the focus of competition from systems to components or, in the differentiation, game from basic operation to proprietary extensions [6]. Service adoption and diffusion is not an option issue for end-users. They want to gain immediate benefits of the service as well as use it up to the level supported by their end device and limited by their spending budget. Successful disruptive innovations introduce simple, affordable and easy to access service for users who historically lacked money or skills to get important jobs done. [7]. Diffusion of innovations has been analyzed thoroughly by Rogers [8] and Bass [9] and by a vast number of other researchers, including Dekimpe et al. [10] and Gruber et al. [11]. The important notion of all the earlier research is that the number of success factors related to the innovation itself is not overwhelmingly high. According to Rogers, the most influential factors of the service adoption include complexity of the product and the service, including usability and configurability, compatibility with other relevant services and relative advantage of the new service compared to the earlier ways of executing similar tasks. Trialability and observability are important in the persuasion phase to speed up the diffusion. The nature of the adopters has significant impact. Rogers has defined five types of adopters, innovators,

early adopters, early and late majority and laggards. The factors mentioned above are most relevant to the early and late majority influencing their willingness to subscribe and hence define the mass-market inflection point. Due to the strong social nature of group communication, network effect is assumed to become an important factor in this particular service adoption process. Business users are often a driving force of service diffusion through the Chasm and Tornado phases to the mass-market adoption as described by Moore [12]. Moore has a technology adoption view to the same phenomenon and therefore he is emphasizing the “whole product” as the main tool to manage the equation between complexity and perceived added value when entering the phase of fast growth in the adoption. In the following sections we analyze several critical factors’ influence to the diffusion of PoC using the theoretical foundations discussed above. We also present one successful service provision case as a reference to identify the critical service provision issues.

3. Standardization The relevant standardization bodies for PoC include 3GPP, OMA and IETF. Each one of them in principle has a clear mandate but in practice, the work-plans are not fully in line. The primary role of the 3GPP (The 3rd Generation Partnership Project) is to develop technical specifications for GSM evolution to 3G. For PoC the most relevant work area in the 3GPP is the Internet Multimedia Subsystem (IMS) specifications [13]. OMA (Open Mobile Alliance) is set to develop application and service enabler specifications independently of the underlying network technology. Many OMA members are also actively participating in the 3GPP but especially IT vendors are focusing their efforts to OMA rather than to 3GPP. OMA has inherited many pre-IP era application specifications, e.g. WAP Forum and Wireless Village. This provides a stable basis but in many aspects is also a burden, since the compatibility of such legacy to 3GPP IMS has not been any goal in the beginning. Source of additional friction is that the pre-IP era protocols are competing also with the IETF protocols for similar purposes. Co-operation between OMA and 3GPP is getting better but still there are several complicated areas to be sorted out. The 3GPP has also been working with Presence, Group and Instant Messaging as well as IMS Conferencing that are considered application specifications and therefore potentially belonging to the OMA mandate. All of them are important functionalities of the PoC concept. The way of working in the IETF (The Internet Engineering Task Force) is quite different from the

business driven bodies such as the 3GPP and OMA. The primary focus in the IETF is in the protocols. In many cases, the IETF has not achieved single solutions but instead there are several parallel protocol specifications for the very same purpose. Related to the work in the 3GPP and OMA the most critical protocols that are on the IETF’s responsibility include SIP and SDP [14].

PoC session. PoC server is an essential tool in opening current IP technology bottlenecks: the Network Address Translation (NAT) and firewalls that isolate sub-network hosts from the open Internet. •

Performance enhancements for optimum user experience and for wireless friendly transmission include IPv6 header compression, SIP signaling compression for efficiency and for support of Quality of Service classes.

The PoC is the first of its kind of real-time service using packet bearer technology in mobile cellular system and therefore there are some fundamental new challenges to be addressed. The current main challenges that are recognized in the standards bodies include:

Figure 1. PoC standardization layers The PoC standardization process is an exception to a typical 3GPP and OMA standardization process. The baseline technology is a synthesis of available technologies (Figure 1). Standardization has not yet achieved the status of pointing out the dominant design but most of the relevant players have committed to work together for one single PoC standard.

4. System Architecture of PoC PoC system architecture has been developed first for the GSM system but it can be easily applied to any other cellular or wireless system that supports transparent packet bearer. Key technologies of PoC include: •

Wireless radio link that is always-on and always connected to the IMS Core, to all relevant application servers (AS) as well as to any other Internet Access point (APN).

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SIP based signaling used in 3GPP/IMS Core.

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Half duplex voice over IP, utilizing the 3GPP AMR voice codec as default.

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PoC server connecting the PoC sessions and bringing the users together. PoC server also multiplies the speaker’s bit stream to multiple streams for the participants of the

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Floor control that shall provide high performance (low latency, high spectrum efficiency) and future proof solution (compatible with floor control protocols in the Internet).

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Dedicated support to GSM/GPRS/WCDMA. Support of the CDMA2000 radio access as well as WLAN (IEEE 802.11) should work transparently.

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Server-to-Server interfaces for interoperability shall be specified.

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A General harmonization of approaches is needed in order to provide seamless operation both in mobile and fixed environments. This will be crucial for the long-term success of the PoC and its evolution.

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Currently the IMS is specified to fully utilize the modern version of Internet Protocol but several Mobile Network Operators (MNOs) are optimizing their plans for short-term targets requiring vendors to provide dual stack IPv4/IPv6 products. This may cause legacy problems when PoC is used in multi-operator environment. PoC is implemented as a client-server architecture on the top of the 3GPP IMS/SIP core (Figure 2). The PoC system includes a dedicated Group List Management Server (GLMS) that handles the PoC Group call features and functions. PoC does not have its own presence server but it will use any applicable presence server available through the Ipl, Ips and Ipp interfaces. Similarly, any other application layer service enabler such as a location server may be connected to provide additional capabilities for PoC users and user groups. A key element in the PoC architecture is the supported independence from the network operator. There are several scenarios where well-defined interfaces between the IMS Core and PoC server are needed. The most obvious cases include support for Mobile Virtual Network Operators and Value Added Service Operators. But similarly, the possibility for enterprises and independent ISPs to provide PoC

services for their own employees or directly to consumers is an important opportunity.

Figure 2. System Architecture of PoC [15] The PoC system solution is able to provide the complete service, a whole product, which has been seen important by e.g. Moore. In order to gain a role as a mainstream service, PoC needs a credible evolution path that allows the service to improve at the same pace with hardware and software evolution. In practice, this means that the future PoC conferences have to support also full duplex voice conversations. In the short term, it is even more important to extend the set of supported content formats from current AMR voice to any multimedia content. This way it is possible to share any audio or video or other document file as part of the PoC conference.

5. Vendor Product Strategy The PoC vendors have to balance between PoC optimized products and compatibility with current services, balancing between the complexity and compatibility factors of the Rogers’s model. The most important compatibility factors include terminal level dual mode operation with circuit switched services and integration of PoC features with the other relevant applications in the terminal. In order to be used in everyday life the PoC application requires good holistic usability and user interface level integration with at least presence, messaging and phone book functions of the mobile client. Terminal vendors may need to redesign some of the product concepts for better usability and added value, because PoC use cases are unique and do not exist at all in current terminals. Role of hands-free becomes much more visible, including easy control of “push” to talk. It is not possible to manage the push switch with software

features alone. Using push-to-talk is a visible new behavior and it should speed up the diffusion process according to Rogers. For mobile equipment vendors PoC is an additional feature that will fuel the update cycle of end-user devices. For some terminal models, PoC will be available also as a downloadable software add-on. Downloading capability is an important enabler for testing the service. Rogers has shown that trialing is a strong driver in the diffusion process. PoC impacts not only the sales of the mobile devices but indirectly also to the competition for the winning application platform. Symbian and other software platform vendors have to make sure that the platform performance and API set support the needs of PoC, too. The PoC concept is complex with many internal and external interfaces. Complexity in the telecom network is often unavoidable but sometimes these systems can also be simplified. For instance it is not necessary to build inter-working between PoC and circuit switched calls in the network because the terminals will support circuit switched calls anyway. Full network based interworking with circuit switched paradigm is an extremely complicated issue and will face some regulatory challenges, too. Modular design and support for both centralized and distributed management models reduce the risk of implementation as shown by Gaynor. A distributed system concept of PoC also allows vendors to build the infrastructure jointly when necessary. Uncertainty on the speed of diffusion can be balanced by gradual entry to the PoC business and keeping the option open to become a turnkey system vendor later.

6. Substitutes The history of communications technologies has shown that substitutes and rival de-facto standards can impact significantly to the success of technologies developed in the formal standardization process. Defacto standards often increase the innovativeness and accelerate the overall market growth. Therefore it is important to consider alternative ways to offer similar services to OMA/3GPP PoC. As the PoC server is fundamentally an application server running on the top of the 3GPP/IMS Core and the terminal functionality may be based on downloadable client software, it is obvious that a similar service can be created using proprietary protocols. There are several such initiatives emerging, one of them is service called Fastchat [16]. It provides user experience similar to the planned OMA/3GPP PoC and the service is available now. The Fastchat client is well integrated into the Symbian software platform, which extends the relevance of the client beyond basic PoC.

7. Regulation Internet voice services are not covered today by the same regulations as the fixed and mobile voice services. The main aspects of the telecom regulation that still may have some impact on service diffusion of PoC include issues related to privacy and interception. A PoC server multiplies all PoC voice traffic and hence eavesdropping is easy to arrange at the server. Also the privacy of the group membership lists and databases is an important concern. These points are especially relevant in those cases, where somebody else than the established network operator operates the PoC server. Authorities and regulators have different opinions in different countries about the PoC but they seem to choose not to apply any interception requirement to IP based multimedia services, especially if there is no interworking and no direct connections to the legacy telecommunications networks and services provided. It is possible to intercept the PoC voice traffic at the PoC server but it becomes more difficult if the PoC server is

out of the domain of the authorities e.g. in a different country. Even though the roots of PoC are in the military, it is clear that the PoC system is not able to support the real emergency services. Those shall be left to professional system technologies such as TETRA. The current half duplex mode of operation limits the usability of PoC for emergency calls even further.

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Presence and Groups are both managed by Fastchat proprietary servers. Independent third party players can’t integrate their technology as deeply with the radio standards as the 3GPP/OMA specification teams can, therefore Fastchat will have problems with latency and charging and the network-wide “whole product” idea is in jeopardy. The Fastchat service speeds up the application development beyond the roadmaps of the traditional players, i.e. MNOs and their direct suppliers. The Fastchat solution is also a choice for independent service providers and enterprises, while the 3GPP / OMA based products are not available and even longer if the latter is developed for walled garden value systems only. The experience gained by Fastchat and by other early market players, will benefit the standardization and the mainstream developers by adding experimentation and option for distributed management model to usually centralized telecom market. A more controversial approach—from the mobile market point of view—is the use of P2P (peer-to-peer) technologies for group and point-to-point Internet voice communication. A very interesting example is the voice and multimedia oriented P2P system, Skype, which builds on the experience of KaZaa [17]. P2P technologies have, however, inherent problems in the throughput limited wireless environment, especially in high-priced cellular systems. But surely, it is not an impossible task to develop protocols that can be competitive also in wireless systems and then simply wait for the wireless data tariffs to go a bit lower.

Value Added Service Provider

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Virtual Network Operator

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Figure 3. Ideal Value System Options for PoC The regulatory aspects are, however, very important in creating a competitive business environment for PoC. There should be no limitations for who is able to run a PoC server. Regulators should limit the MNOs using their monopolistic power in keeping the price of data bearers artificially high for other PoC service providers (Figure 3). Possibility to build several different value systems using a single technology increases the opportunities and also enhances the diffusion of the technology paving the road for mass-market adoption. In order to utilize the leading role of business users, value system scenarios should include an option for some companies to run their own PoC server and service on the top of the standard cellular infrastructure.

8. Service Provision Standards are developing in several technical bodies, there are also substitutes emerging and there is no dominant design or platform available yet for the PoC. Obviously the market uncertainty of PoC today — especially in Europe—is high.

8.1 Case NEXTEL There is currently only one large-scale commercial service provision case of Push to Talk. The success story of Nextel in the USA has been quite remarkable. The roots of Nextel are in the Enhanced Specialized Mobile

Radio (ESMR), a professional mobile radio. This provided them a low cost access to mobile radio spectrum in the US during the years when other cellular (especially the PCS) operators had to pay high auction prices for radio spectrum. Since the spectrum available for Nextel was allocated for ESMR use, they had the obligation to provide also the very basic PTT service as part of their service offering. The additional requirement however became one of the key system features, called Direct Connect. This feature has enabled Nextel to differentiate from the other cellular network operators and to maintain higher ARPU and customer loyalty. Nextel today has some 15 million subscribers (12/2004) (ca. 10 % market share of the continental USA cellular subscribers), over 90 % of them using Direct Connect. Many of the users are professionals such as employees of small businesses but the users of Direct Connect include also a lot of ordinary people, for example families and teenager groups [18]. Nextel has extended their offering to cover all typical features and functions available in other networks today, including variety of terminals, an application execution environment (J2EE) and other services ranging from ring tones to location services. This is an evidence of the similarities of the user groups indicating that combining PTT to ordinary cellular radio and vice a versa is viable. The main weakness of Nextel service offering is probably its limited coverage and lower competition in terminals compared to global systems because of the proprietary technology.

8.2 Service Provision Strategy The benefits of PoC for network and service operators are obvious. PoC is a low capital expenditure technology. Servers can be implemented with commodity HW, operated like normal WEB servers and applications may be downloadable. The server infrastructure scales well with the traffic and later most of the relevant terminals will include PoC as a standard feature. For operators PoC is clearly a way to differentiate and to segment the service. PoC increases customer loyalty by creating collective switching costs within the PoC groups, assuming that the whole social group using the service is served by the same operator. The service concepts are not always transferable between different markets. The Nextel case provides a credible analogy but difficulties of I-mode outside of Japan demonstrate however the high risks in estimating cross-market service diffusion. Thus the success of the PoC in e.g. Europe is not guaranteed. Global deployment will on the other hand enhance the service adoption via cross-country diffusion [19].

Some new service adoption catalyst should be useful as part of the service provision strategy. Agent based diffusion thinking emphasizes the positive network effect. The word of mouth network effect may be enhanced using super-distribution via MMS (a colleague or friend passing the application over to the potential new user). Compatible products and networks maximize the value of the service according to Metcalfe’s law. The critical mass is achieved much earlier if the technology is not fragmented. Market fragmentation may dilute the positive network effect if operators choose to compete in isolated networks. The complexity of the service installation process has often been a challenge to the majority of end users. Easy provisioning (configuring the product, application and the service) or sophisticated support at the point of sale is a basic requirement. Lockett [20] has identified the important role of intermediators as promoters for service adoption with SME’s for medium and high complexity services. For a consumer, settings should be available automatically with the application, or at least manually over-the-air. This requires cooperation between vendors and operators. According to Rogers, a decision to adopt a service is a balanced consideration between uncertainties, costs and added value. Therefore the end user cost of the engagement phase should be minimized. Even a short free trial period of the service is a powerful tool to encourage new customers to get familiar with the PoC. For consumers it is essential that the service quality will satisfy their needs. Nextel is demonstrating latencies lower than 1 second for push to talk. In the OMA specification the target value is 1,6 seconds. It is a bit unclear if this performance is good enough. Another target, the perceived voice quality (MOS > 3 in OMA) is also at the lower end of the expectations of the ordinary user. GSM voice codec today provides MOS > 4. Price is a fundamental factor for a successful service adoption that must be in a reasonable relationship with the value of the service. One point of comparison is the circuit switched voice conference. Price of the GSM multiparty service can be taken as some kind of an upper limit for the acceptable price level. Using current tariffs for GPRS packet data this is quite achievable for PoC in some markets already today.

9. Conclusions The Push to talk over Cellular has a clear potential to provide significant strategic value to the mobile communications domain. It can create a new mobile data service evolution trajectory starting from voice and extending later on to other group applications. Several critical factors have to be considered in order to achieve a successful service adoption. The PoC concept is

utilizing evolving technologies coming from the Mobile Communications and from the Internet standardization. This convergence has an opportunity to combine the best parts of the both domains but at the same time it includes significant technical and business risks. The PoC system architecture allows distributed management promoting experimentation in open value systems to reduce market uncertainty. The solution scales well towards more centralized system with the mass adoption. Success of the Nextel case indicates that there may be a good match between technology push and market pull. Enhanced support of social groups builds lock-in relationship between the end users and through the service with the service provider. Comprehensive service and value proposition, low complexity of the use cases and high usability depend on small items. Strategy may be right but too many tiny obstacles can still make the potential customers to reject the new service. Operational excellence and reasonable pricing of the PoC service will finally define the role of the PoC as a new potential mainstream service. We have analyzed factors that impact the service diffusion of the PoC and we have made some recommendations based on the literature and earlier experience but we have not proved that PoC will definitely be broadly adopted. Should the PoC market entry succeed, the second wave of the technology is needed promptly to facilitate the market growth. Service enhancements such as providing and sharing any MIME content during a PoC conference is a natural evolution path. Providing better performance in the form of enhanced support of QoS classes and enabling full duplex mobile VoIP conversations will require additional development work throughout the system.

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