Nokia plans to start selling a two-way radio mobile phone

Nokia Oyj, the world's largest maker of mobile telephones, has developed a handset that also works like a walkie-talkie in a bid to lift sales and defend its market share against rivals such as Motorola Inc.

The 5140 phone lets users talk by pushing a button rather than dialing a number. Nokia, based in Espoo, Finland, plans to sell the phone to AT&T Wireless Services Inc and Cingular Wireless LLC, Markku Savusalo, who heads Nokia's push-to-talk division, told reporters at a company-sponsored conference in New York.

Sales the handset will start next year and may help Nokia challenge it biggest competitor, Schaumburg, Illinois-based Motorola, which dominates the market for walkie-talkie phones.

Cingular AT&T Wireless are seeking to take business from Nextel Communications Inc and Verizon Wireless, the only nationwide US providers of push-to-talk service.

Yankee Group analyst Adam Guy said Nokia's new phone may help carriers such as Cingular and AT&T Wireless attract new customers to walkie-talkie calling, though it's unlikely to help them win over existing Nextel customers.

"No matter what they do they're not going to be able to replicate the immediacy of Nextel," Guy said.

Nokia aiming its new phone at consumers, rather than businesses, the main market for Nextel's service, Savusalo said.

"That market really hasn't been addressed at all," he said. "It's a brand new opportunity."

Nokia, whose sales have risen no more than 2 percent in any of the past nine quarters, plans to sell a range of push-to-talk capable phones around the world next year, according to Savusalo.

The first, which includes a built-in camera, will start selling in the second quarter of next year.

Nokia's global market share was 36 percent, compared with 15 percent for Motorola.

Nokia's American depositary receipts rose US$0.61, or 3.6 percent, to US$17.69 at 2:45pm in New York Stock Exchange composite trading.

Motorola shares gained US$0.27 to US$13.59.