INTERVIEW-Sprint PCS counts on mobile data to rev up growth
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NEW YORK, Aug 8 (Reuters) - Sprint PCS Group's (NYSE:PCS - News) $1.4 billion network upgrade will allow the No. 4 ranked wireless company to regain momentum in the bitterly competitive U.S. telecoms market, President Charles Levine said on Thursday. ADVERTISEMENT
"It gives us a competitive advantage that we haven't had in a while," Levine said in an interview with Reuters.
Sprint unveiled on Thursday its long-awaited plans to offer customers the ability to easily check e-mail and surf the Web from their mobile phones, a move analysts said was likely to fire up a competitive battle in the U.S. wireless market.
Describing the service as the biggest event since the company launched digital mobile services in the mid-1990s, Levine said the launch should make up for the company's dismal subscriber additions in the last quarter.
"(Last quarter) humbled us. I don't really like being humbled. This will allow us to regain our competitive advantage and regain the lead that we've had," Levine said.
He said Sprint PCS's national push into mobile Internet services also promises to shore up its parent company, Sprint Corp. <FON.N, the No. 3 supplier of long-distance services in the U.S., a market beset by brutal price competition and bankruptcies.
Aside from the gee-whiz features like photo-swapping and mobile e-mail, Levine said the network investment will result in crucial improvements to its voice services by doubling the amount of calling capacity.
"We took a $10 billion plus network and for $1.4 billion we doubled its capacity," he said. "It was an enormous investment on one hand. But one of the things it allowed us to do was get twice as much voice capacity."
But Levine cautioned that customers using traditional phones would not benefit from the greater capacity until a significant portion of them switch over to the advanced phones, which take advantage of the more efficient network.
"The more people who buy the new high-speed phones, the better the service will be for existing customers," he said.
GADGETS AND COVERAGE
Sprint is the last of the top four U.S. mobile service providers to offer fast mobile data, but Levine claims it is in a better position than its rivals due to geographic coverage and the array of devices it has to offer.
Levine also said that Sprint is kicking off its service with a greater number of available phones for purchase than any of its competitors. Rivals Verizon Wireless (NYSE:VZ - News; London:VOD.L - News), Cingular (NYSE:BLS - News; NYSE:SBC - News) and AT&T Wireless (NYSE:AWE - News) have introduced high-speed data services on parts of their networks but with fewer phones to start.
In addition, he said the company plans to use its $3 billion 2003 capital spending budget to continue beefing up its data network speed.
Sprint is working on a more advanced upgrade that would increase its network speed to transmit millions of bits of data per second to and from each mobile phone. This development will take about two years and should result in higher speed services in 2004/2005, Levine said.
WHAT PRICE SUCCESS?
While the company is offering access to unlimited amounts of e-mail and Internet data for a set price, this is an introductory offer and pricing is likely to increase depending on how many customers sign up.
"If I've got an additional million customers nicely spread out across the U.S., its okay. If all of them are in Manhattan I've got a big problem," he said, referring to the potential need to add expensive network gear in hot spots.
Sprint has not said how many customers it expects to use the new service. But Levine said that the 1999 introduction of a slower-speed Internet access service could be instructive. In that case, more than 10 percent of its subscribers used data on their phones after one year, a rate he hopes to improve upon.
"I think it will be way more than 10 percent, and I would like it to be more than 20," by the end of 2003, he said. "But we'll wait and see how customers respond."
The company counted 14.6 million customers as of June. |
