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Cingular walkie-talkie service to rival Nextel

December 3, 2005

NEW YORK, Dec 2 (Reuters) - Cingular Wireless, the biggest U.S. mobile phone service, plans on Monday to introduce a walkie-talkie feature aimed at stealing customers from Sprint Nextel Corp. (S.N: Quote, Profile, Research) , currently the leader in that market. Cingular, the wireless venture of AT&T Inc. (T.N: Quote, Profile, Research) and BellSouth Corp. (BLS.N: Quote, Profile, Research) is the last of the big three U.S. mobile providers to offer the feature, which was popularized by Nextel Communications, now part of Sprint Nextel.

But extra bells and whistles and a wider network reach than Nextel could give Cingular an edge in winning new customers and boosting its average monthly revenue per user (ARPU), as well as its customer loyalty, one analyst said.

"There's an opportunity for them to increase ARPU, reduce churn and to steal some of Nextel customers," said Andy Seybold, president of consultancy Outlook 4Mobility.

He estimated that, Alltel Corp. (AT.N: Quote, Profile, Research) , which does not have a national network like Cingular, but uses the same technology for its walkie-talkie service, has already lured away hundreds of thousands of Nextel customers.

New elements to the Cingular service include icons that let users see who else is available, similar to the buddy list system used for Internet instant messaging services.

Users will also be able to instantly call a group of up to 20 people and set up a mobile conference calls, it said.

It is aiming its service at consumers such as families and teenagers, as well as business customers.

"There a big market for business, but there's a huge market for family and friends," said Seybold who estimated that the service could attract as many as 20 percent of Cingular's more than 50 million existing customers.

Cingular plans to charge $9.99 a month for individual users, on top of its regular monthly fees, and $19.99 for a family of up to five people