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To: Frank A. Coluccio who wrote (11982)	10/18/2001 5:40:57 AM
From: elmatador	Respond to of 12823

Sprint ends broadband plan and cuts 6,000 jobs By Richard Waters in New York Published: October 17 2001 23:36 \| Last Updated: October 17 2001 23:45 Sprint on Wednesday abandoned efforts to build a national broadband communications network as it unveiled a cost-cutting plan that will lead to $2bn of charges and the loss of 6,000 jobs. The decision ends one of the most ambitious efforts in the US to create a network capable of carrying voice, data and video to homes and businesses. Called ION, or the Integrated On-demand Network, the plan was the latest in a series of ambitious ventures by Bill Esrey, Sprint's chairman and chief executive. Mr Esrey had already built the first national fibre-optic in the US, the foundation of Sprint's long-distance business, as well as the first all-digital wireless network, Sprint PCS. However, the five-year-old ION project has been bedevilled by technical challenges and high costs and Wall Street has been waiting for months to find out whether Mr Esrey would continue with the plan. He blamed "the rapidly changing industry landscape and future funding requirements" for the failure of the project. Sprint also disclosed plans to streamline other parts of its operations in an effort to repair its sagging profits. The company reported on Wednesday that its earnings per share fell to 28 cents in the third quarter from 43 cents a year before, as the costs of building ION and the effects of competition in the long-distance business were partially offset by higher earnings from local services. The closure of ION and other cost-cutting will involve $600m of cash expenses as Sprint pays severance to workers, ends contracts with suppliers and terminates leases on buildings. The $2bn of pre-tax charges, to be taken against fourth-quarter earnings, also include asset write-offs and other accounting charges. The closure of ION, along with a connected move to halt marketing of services using MMDS, a broadband fixed-wireless technology, would produce annual pre-tax savings of $1bn a year starting in 2002, Sprint said. Sprint PCS, the wireless arm that trades as a tracking stock of Sprint, said it had added 1.2m new customers during the quarter, leaving it with 14.4m customers. It also raised its 2001 customer target to 4.2m, from 3.8m. The higher costs of assuming more new customers would wipe $100m from an earlier forecast for earnings before interest, tax, depreciation and amortisation (ebitda), leaving the company with $1.6bn this year, Sprint said.