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AT&T Ready to Fight for Sprint's Push-To-Talkers

It seemed like a good idea at the time (2005). Sprint Nextel (NYSE: S  ) -- just plain old Sprint at the time -- looked at the success Nextel was having with its unique push-to-talk iDEN network and a light bulb went off: "Hey, why not acquire Nextel? We'll get more subscribers and have something to distinguish us from the competition."

Too bad that light bulb was just 40 watts. Gary Forsee, Sprint's chairman and CEO at the time, saw his not-so-bright idea backfire. Despite spending billions of dollars trying to integrate Sprint's legacy network with the iDEN PTTnetwork, the carrier's overall service became less than stellar and began losing customers at an unhealthy rate.

Seven years later
Last May, the Federal Communications Commission approved the 800 MHz spectrum -- the same frequency range used by Sprint's iDEN network -- for 3G and 4G use. That was the death knell for iDEN on Sprint; the company announced it expects to shut iDEN down as early as June 30, 2013 and use its spectrum for its LTE network.

There is still a market for push-to-talk services, especially for business customers, and Sprint hopes to migrate its iDEN customers over to its beefed-up Direct Connect PTT ability on its CDMA network.

A shark in the water
But this November, AT&T (NYSE: T  ) will launch what it calls its Enhanced Push-to-Talk service, according to an AT&T web site. And FierceWireless is reporting that an informed source tells it that Enhanced PTT will run on Android phones sporting version 2.3 and up, Windows Phone 8, BlackBerry 7, and even on feature phones with Java.

AT&T smells blood and is circling Sprint waiting for any of its iDEN customers to jump ship. Here's AT&T's come-on from its website: "Is your business using iDEN push-to-talk, and looking for a better alternative that will be around for the long run? ... AT&T Enhanced PTT provides a superior push-to-talk experience."

Nextel brought 16.2 million subscribers to its merger with Sprint, but could only count 4.4 million iDEN customers by the end of last June. It cannot afford to lose many more.

AT&T has been a dividend-lover's standout for a while, but for other solid income-producing companies, click here to read this Motley Fool special free report.

Fool contributor Dan Radovsky owns shares of AT&T. The Motley Fool has a disclosure policy.
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  • Report this Comment On September 18, 2012, at 1:16 PM, Purdone wrote:

    There is already a free app for Android, iPhone, and Windows called HeyTell. I think if AT&T tries to invent their own app, and then try and make money off of it, they are going to be surprised that more and more folks will find out how to do it for free.

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