Sprint Offers New Network for Simultaneous Calls
New York, June 2 (Bloomberg) -- Sprint Corp., the No. 3 U.S.
long-distance company, unveiled a phone network that lets users
make multiple calls, get faxes and hook to the Internet at high
speeds, all at the same time through a single phone line.
The new system, developed at a cost of more than $2 billion
during five years, can deliver a typical voice call about 70
percent less expensively than existing networks, Sprint said. It
also can provide video and conference calls that are cheaper than
a traditional long-distance call, the company said.
Sprint is betting the network will help boost its share of
the fast-growing market for Internet and data services used by
consumers and companies. Still, Sprint faces hurdles such as
working with the Baby Bells, whose lines are needed to connect to
homes and businesses, and educating customers about the
advantages of the system.
''Selling that thing is going to be a beast,'' said Daniel
Zito, an analyst at Legg Mason Wood Walker Inc., who doesn't have
a rating on the stock. ''There's a long education process and
that leads to long sales cycles.''
Sprint rose 1 9/16 to 73 1/2 in late morning trading. No. 1
networking company Cisco Systems Inc., whose equipment will
direct traffic on the network, rose 1 7/16 to 75.
High-Speed Race
Sprint's move comes as phone companies race to offer
customers faster data and Internet hookups. Sprint said customers
of the new system can access the global computer network as much
as 100 times quicker than through a typical modem.
Customers are expected pay about $200 for the equipment
needed to link to the new network. Sprint didn't disclose per-
minute charges for phone, video or data services.
The equipment and software will be sold to consumers through
Tandy Corp.'s Radio Shack electronics stores, where Sprint
already sells its other phone services.
''We will be offering every Sprint customer their own multi-
billion-dollar, unlimited-bandwidth network in the same monthly
price range that many customers spend today for communications
services,'' said William Esrey, chairman and chief executive.
Sprint's network, which was developed under the code name
''Project FastBreak,'' has been tested with businesses and
consumers for the past year. The company said on a conference
call with analysts and investors that the network will be
profitable and have positive cash flow in 2001.
Traditional phone companies ''likely are going to have to
write down the value of their assets'' because Sprint's strategy
will make them obsolete, President Ronald LeMay said.
The network will be available to large business customers
this year.
Small businesses won't be able to get the service until mid-
1999. Residential customers can't get it until late 1999.
Fast Hookups
Sprint's not alone in its quest to provide fast links to the
Internet.
U S West Inc. said in early May that it will introduce high-
speed Internet access through a technology called asymmetrical
digital subscriber lines in 40 cities. Two weeks ago, BellSouth
Corp. said it will offer high-speed access in 30 cities by next
year. GTE Corp. has similar plans.
One way Sprint differs, though, is that is will charge
customers for the amount of traffic they use on the network,
rather than charging them a monthly fee. That's one reason the
cost of carrying a voice call will be 70 percent to 90 percent
cheaper than calls today, Sprint said.
Some businesses already have signed up, Sprint said. Ernst &
Young LLP, Silicon Graphics Inc., Sysco Corp., Coastal States
Management and Tandy are among the businesses that have already
signed up to use the service, Sprint said.
The network is based on Cisco equipment using so-called
asynchronous transfer mode, or ATM, technology. It also uses
software from Science Applications International Corp.'s Bellcore
unit.
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