AT&T Wireless (AWE) is waving a white flag on the walkie-talkie front.The teetering Redmond, Wash., wireless giant had planned to introduce two-way radio service this quarter. But executives on a conference call with analysts Friday said there had been a change of plan. Instead of preparing their own offering, AT&T Wireless executives said they would work with other carriers to develop a common platform -- delaying the project indefinitely. To some observers, the move is just a case of a few more wheels coming off the nation's No. 3 wireless player. But others say the decision is a wise concession given AT&T Wireless' pending merger with Cingular, a joint venture of SBC ( SBC) and BellSouth ( BLS). "AT&T Wireless is working hard not to look like a lame duck, but I think it is wise for them to wait on push-to-talk," says Yankee Group's Roger Entner. "It takes a lot of focus, energy and money to launch this service." Bailing out of the solo effort isn't exactly surprising, especially now that Nextel ( NXTL) has virtually
Industry observers say the early walkie-talkie efforts from Sprint ( FON) and Verizon ( VZ) have done little more than validate Nextel's technological superiority. "They can't build a better mousetrap or differentiated push-to-talk service," says Dunsby. "So the best thing Nextel's challengers can hope for is building their own interoperable walkie-talkie systems to help boost revenue." But don't expect any help yet from Nextel on compatibility, says Yankee's Entner. Even though the Justice Department is
reviewing the push-to-talk business, industry experts say there's no rule that says Nextel must open its system to rivals. "It wouldn't be smart, financially, for Nextel to be interoperable with other carriers until they have five or six million push-to-talk users," says Entner. Hand it to AT&T Wireless -- they know when to call it quits.