Is our little camper in here somewhere?
IBD - 9-7-99
Sprint Readies Wireless Web To Net
People On The Move Sprint Readies
National Service Bringing Web To
Cell Phones
Date: 9/7/99
Author: Reinhardt Krause
Will Wireless Web deliver what earlier cell-phone data services
couldn't?
Sprint Corp.'s wireless unit says it will. Sprint PCS plans to
launch Wireless Web over its national digital network in late
September.
The service will let subscribers access the Internet via new
Web-surfing phones from NeoPoint Inc. and Nokia Corp.
Pricing starts at $9.99 on top of regular monthly wireless fees.
Subscribers will access text-only Web content from Yahoo Inc.
and others. They can retrieve stock quotes, e-mail and other
information. With a $200 cable kit, customers can use Sprint's
digital phones to connect laptop computers to the Internet.
Sprint claims its network coverage has fewer gaps than earlier
services. It will vie with wireless data services from Metricom
Inc., Nextel Communications Inc. and other carriers.
Andy Sukawaty, chief executive of Sprint PCS, discusses his
strategy with Investor's Business Daily.
IBD:
What sets Wireless Web apart from other data services?
Sukawaty:
It's a national launch in 280 cities simultaneously. It's not a
couple-of-cities test. It's also an open-access system. That is,
we don't have proprietary information sources that you can
access from your wireless phone. You can access the things
you would typically get from basic Internet services. That's
why we partnered with Yahoo on this. Some others are using a
single ISP (Internet service provider) and lock in a set of
services you can access.
IBD:
How much revenue will Sprint PCS get from data services?
Sukawaty:
In Europe, some carriers are claiming that between 5% and
15% of their network traffic is data services, including short
messages. In the U.S., I don't know of any carrier running
even at 1%. In the next three years, we could see getting up to
about 5% of our traffic mix coming from data transmission.
After that, we could see pretty dramatic growth. Clearly there's
a sizable business opportunity, with e-mail and the Internet
having grown to the size they have.
IBD:
Are Wireless Web's transmission speeds fast enough to keep
people interested?
Sukawaty:
The speeds are comparable to the most common dial-up
wireline connections used today, which is actually 14.4 kilobits
per second. We plan to double the data speeds within 12
months or so.
In terms of across-the-board access from a wireless device on
the move, it sets a standard that really hasn't been achieved
except maybe on a trial basis. The speed is only going to get
better as we add compression and make network
improvements in the years ahead. Hopefully we can keep up
with the insatiable demand curve for speed.
IBD:
Who will be most interested in wireless data services,
consumers or business people?
Sukawaty:
I think business users are going to get on group messaging
pretty fast because it makes a lot of sense. Companies we've
talked to are very interested in it.
Take real-estate agents. As interest rates change, they like to
have up-to-date information. You could do a daily broadcast
out to (wireless) handsets on the latest interest rates. That kind
of service doesn't interrupt the agents from anything else
they're doing. They pick it up when they want to. That
complements a voice service.
For the casual-user situation, there are traffic reports and
weather reports. Those kinds of things are very
location-specific. People are interested in them when they're on
the move.
IBD:
Won't people prefer flat- rate, unlimited-usage billing for
wireless Internet access?
Sukawaty:
I agree that the world is moving toward bundles for data and
voice, but not to pure flat-rate service. That means I pay $15
and I get as much (Web access) as I want. That's not the way
it's going in wireless.
The big surprise in this industry has been that people are
willing to spend a lot more than (analysts) ever thought. That's
because they're getting better value, combined with
convenience, which drives this as more of a lifestyle product.
We're getting 300 to 400 average (voice) minutes a month.
Three or four years ago, the averages were 110 to 120
minutes. We're going through a revolution in how people think
about mobile phones. People will spend money if they get a
decent (rate plan).
IBD:
Sprint PCS has invested billions in building a wireless network.
When will it turn profitable?
Sukawaty:
We're on track to break even (in cash flow) in late 2000, and
for a full year in 2001. The irony is that because of customer
acquisition costs, you can have a situation where your growth
pushes that break-even point out a little bit.
(C) Copyright 1999 Investors Business Daily, Inc.
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