WSJ article about Sprint PCS plan with no roaming fees.
May 19, 1999
Sprint Offers New Wireless Plan
In a Bid to Compete With AT&T
By NICOLE HARRIS
Staff Reporter of THE WALL STREET JOURNAL
NEW YORK -- Sprint Corp.'s wireless unit unveiled an ambitious calling plan
targeting business customers.
The offering, for one flat fee, permits users to make long-distance calls and
calls off of Sprint's network. It is intended to compete with AT&T Corp's
popular Digital One Rate plan, which offers nationwide calling for a single
monthly rate.
<<<[I am deleting a comparison "chart" that is just unreadable in this format]>>>
Customers like AT&T's plan because they don't pay roaming fees or
long-distance charges.
"There's tremendous growth potential in this market," said Andy Sukawaty,
chief executive of Sprint's wireless division. "The service has grown from an
executive perk to a tool used by a broad range of mobile workers."
Sprint's wireless division has been aggressively signing up customers with its
own flat-rate calling plan. Last quarter, Sprint added 763,000 wireless users,
bringing its total to 3.35 million wireless subscribers.
Now the Kansas City, Mo., telecommunications company is focusing on the
lucrative business arena where customers generally run up larger bills and
switch phone companies less frequently. Market-research firm Cahners
In-Stat, of Newton, Mass., says while one in four employees use wireless
phones for business purposes today, that will grow to one in three by the year
2000. The firm also says wireless budgets for businesses are expected to
increase 50% by the year 2002, signaling growth opportunities in the sector.
Sprint customers will be able to add the new service to any existing wireless
plan for an additional $19.99 a month, as long as they already spend at least
$49.99. By comparison, AT&T's Digital One Rate plan starts at $89.99.
Sprint faces major challenges. Cynthia Motz, a wireless analyst with Credit
Suisse First Boston in New York, said Sprint may meet resistance from
business customers concerned about its history of limited "coverage," or reach,
for cellular service. "There's been a perception by consumers that their
coverage is a little weak," she said. "It may take them a while to really penetrate
this important market."
Mr. Sukawaty disagreed. Coverage is no longer an issue, he said, noting that
Sprint serves more than 4,000 cities across the country. He added that the
company chose to target the business community only after it had sufficient
capacity and coverage to handle extra users. "We had to first deliver on our
promises," he said.
His comments were a veiled reference to AT&T's recent problems with its
wireless business. Users in large markets such as New York have complained
of frequent fast-busy signals and dropped calls due to network congestion.
An AT&T spokeswoman said Sprint's offering isn't as attractive as its plan
because users can only make "free" off-network long-distance calls as long as
they've paid the extra flat fee. "It took them a year to come up with this plan
and we don't think it's competitive," she said. The spokeswoman added AT&T
is always working to stay ahead of capacity demand.
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