Sprint PCS, ECompanies Team to Form Wireless-Venture Incubator
--From AOl.-- Cooters
Kansas City, Missouri, Aug. 28 (Bloomberg) -- Sprint PCS, the wireless unit of Sprint Corp., and eCompanies LLC, a two-month-old firm that guides Internet startups, formed a venture to create and sell wireless Internet services.
Sprint PCS will invest $15 million in the new eCompanies Wireless and may provide access to its own technology and market research. Closely held eCompanies will add expertise, personnel and its seven-step business development process. The venture will be based at eCompanies' headquarters in Santa Monica, California.
ECompanies Wireless will help Web companies alter their content and services for wireless devices such as cell phones, the founders said. It also will provide funding to develop Internet applications for wireless devices and will provide access to equipment and networks that support new wireless efforts.
``While the incubated companies will be open to working with all carriers, we're certainly in a position to have an early insight into them and hopefully be the first to bring them to market,'' said Bill Blessing, Sprint PCS vice president of strategic planning.
Kansas City, Missouri-based Sprint PCS has introduced a series of ``Wireless Web'' products for businesses and consumers since August 1999, hoping to boost customers' monthly usage time and spending by offering access to certain Internet sites and e- mail. Market researcher Strategis Group said in May that wireless- telephone users would pay $61 more for an Internet-ready phone and an extra $13 a month for Web access on that device.
ECompanies provides help including seed money to Internet entrepreneurs, hoping for returns when the ventures sell stock to the public or are acquired. The model will apply at eCompanies Wireless, which may sell shares in itself, said Sangam Pant, eCompanies general manager and executive vice president.
Investors, Entrepreneurs
ECompanies will manage the wireless venture, Blessing said. The partners aren't disclosing the size of their stakes because they expect other investors to join in, he said.
ECompanies Wireless ``will be going after entrepreneurs that have a business plan written on a napkin, at best, or slightly more than that,'' Pant said. That means ``a couple of sharp engineers who have a really good idea but need a lot of help to get to the next level of development.''
The new venture will focus on markets and services that include gaming, entertainment, business-productivity tools and mobile electronic commerce, he said. Pant wouldn't give details on the ventures with which eCompanies Wireless is working already.
ECompanies hasn't taken its initial investments public yet, Pant said. Yet, ``a majority of the companies that came out of the first batch have gone on to get their next round of funding and done extremely well in such difficult capital markets,'' he said.
The company was founded by Jake Winebaum, formerly head of Walt Disney Co.'s Buena Vista Internet Group, and Sky Dayton, who also founded Internet service provider EarthLink Inc. Westwood, Kansas-based Sprint owns 27 percent of EarthLink and was a limited partner in eCompanies' first round of fund-raiding.
Sprint PCS shares on Friday rose 15/16 to 48 15/16. The company had 7.8 million customers at June 30, including affiliates serving smaller markets, making it the fourth-largest U.S. wireless company. Sprint shares rose 1 3/4 to 32 5/16.
Aug/28/2000 0:02 ET |
