US : Last week Nokia launched the world's first GSM based push-to-talk-over-cellular (POC) enabled handset, the 5140.

More here plus photo of the Nokia 5140.

While this may mark an important step for GSM users to enter the POC arena pioneered in the US by Nextel, the impact is far greater, advises technology research firm ABI. Nokia plans to provide POC in all 2.5G and 3G handsets by 2005. This is a bold move, considering the limited market that exists today.

ABI projects about 540 million wireless handsets to be sold in 2005. A move to integrate POC as a standard feature would encourage subscriber adoption thereby boosting ARPU. Further, as a standard feature in handsets, POC may finally enter markets beyond the Americas. Nearly twenty operators across the globe are considering deploying PPOC services at this time.

Operators like Verizon and Sprint PCS have joined the bandwagon, with others to follow soon. With installation of specific application servers and compatible handsets, an operator can provide IP-based push-to-talk services. Nextel's Direct Connect service is based on Motorola's iDEN network and compatible handsets. With a subscriber base of nearly 12.3 million, Nextel enjoys the highest average revenue per user (ARPU) in the industry, at about $71 per month, coupled by a low churn rate of 1.4% for the most recent quarter. Verizon on its part garnered about 100,000 users in six weeks after launching its own push-to-talk service.

Enterprise users rely on POC for collaboration with employees in the field. Companies in logistics, construction and sales, with scattered employees, find the service most useful, and comprise a large portion of Nextel's subscribers. Quite simply, these users cannot function without the service, explaining the carrier's low churn rate. Youth, on the other hand, uses POC as a means of fast communication that falls in the lines of their fast-paced lifestyle. A typical POC cellular lasts for only a minute or so.

Operators spend significant amounts subsidizing feature-rich handsets in order to lure customers to use data services, raising customer acquisition costs. By offering POC services -- which require a relatively less expensive handset -- operators gain a highly loyal user base as well as a higher ARPU. So, unlike other data services like picture messaging, which require more expensive handsets and offer a lower boost to APRU, the exact opposite is true for POC services.

ABI's Wireless Handset Quarterly Service outlines the evolution of the handset to a multimedia and data-centric platform and the progression to the 2.5G and 3G networks. ABI provides a thorough examination of trends in the global market for wireless handsets and offers a realistic outlook on where the industry is headed.