Sprint to Offer High-Speed Internet Service to Houston-Area Customers
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[Knight Ridder Business News]
Houston Chronicle, Texas via NewsEdge Corporation : Jun. 15--Local Internet users frustrated by the wait for high-speed data service may get some relief when Sprint launches a wireless high-speed offering in August.
The one to two megabits per second service is expected to let homes and businesses bypass cable modems and digital subscriber line services for high-speed Internet access. It will operate at speeds many times conventional dial-up services, which can average 56 kilobits per second.
Called Sprint Broadband Direct, the service rolled out in Phoenix this spring and will hit Tucson, Ariz., in July and Houston by the first or second week of August.
The service uses a line-of-sight technology that requires the receiving unit -- a diamond-shaped dish that will mount on a home or business -- to have an unobstructed path to a transmission tower. The towers can be as far away as 35 miles but may be susceptible to interference because of rainstorms and other atmospheric disturbances.
In Phoenix, Sprint estimates about 15 percent of homes and businesses will not be able to receive the wireless service because of obstructions. The cost of the service there is about $40 per month for residential subscribers and $90 per month for businesses.
Installation is free, and equipment costs range from $100 for subscribers who sign a two-year service contract to $300 for month-to-month subscribers.
The service in Phoenix can be ordered online, through Sprint's direct telemarketing sales force or through the Best Buy retail electronics chain.
Sprint spokesman Robert Hoskins said rates for Houston will be similar and that an agreement with a Houston-area retailer is also being negotiated.
Residential and small-business demand for high-speed data access is so strong that wireless service will be welcomed in most markets, said Robert Rosenberg, president of Insight Research Corp., a Parsippany, N.J.-based marked research firm.
"If the penetration rate of DSL and cable modems is low, they will have a seller's market on their hands," he said of Sprint.
In 1999 there were about 7,500 subscribers to high bandwidth wireless services like Sprint's in the United States, compared with about 1.6 million business and residential DSL subscribers, and 2.8 million cable modem users, according to Rosenberg
By 2005 he expects the number of wireless subscribers to grow to 1.2 million, still a small percentage of the projected 26 million DSL subscribers and 33 million cable modem users.
"They're all going to be playing in the same sandbox, though, trying to pick the consumer's pocket," Rosenberg said. "The technology itself is extremely exciting and is part of the reason WorldCom is making a run at Sprint," he said, referring to merger plans between the two telecom giants.
Sprint's service appears to be comparable both in price and capacity to both DSL and cable modem services like Time Warner's Roadrunner. Kimberly Maki, vice president of public affairs for Time Warner's Houston division, said the competition will only benefit consumers.
"When we first launched last August, DSL rates were much higher but came down to match ours," Maki says. "Consumers like to have choices, and we think we provide them with a very competitive choice."
Houston, Phoenix and Tucson were chosen as early markets because the late People's Choice TV, a wireless service that delivered cable programming, served those cities, Hoskins said. People's Choice came to Houston in April 1994 and was acquired by Sprint in September 1999.
"The technology had been developed in part by (People's Choice), and these were all markets that were more prepared to handle the service," he said.
The only other provider of the two-way wireless broadband service is MCI WorldCom and Nucentrix, a subsidiary of Heartland Cable Television. Nucentrix is currently operating in the Austin area.
James Mendelson, an analyst with Washington, D.C.-based research firm The Strategis Group, said Houston will benefit from Sprint's eagerness to please its first customers using the relatively new technology.
"They've invested a lot of money in buying the licenses for these markets, so the early markets will benefit from good customer service," Mendelson said.
The technology has been slow to come to market partly because of the technical difficulty of transmitting high-speed data through the airwaves with little or no interference, Mendelson said.
"It's probably no coincidence that flat places like Phoenix and Texas are where they're rolling this out," Mendelson said.
While the number of residential users of broadband wireless data services will be relatively low in the first few years, Rosenberg predicted it could be a challenge to the Baby Bells.
"For the SBCs and Bell Atlantics who think their franchise rests on the copper loops they have in the ground, wireless could mean trouble," Rosenberg said. "There's a tradeoff, with more reliability and bandwidth in copper vs. wireless, but copper loops are no great shakes either."
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