Sprint sets rollout of phone service of the future

Cheryl Wittenauer

Tuesday, June 22, 1999 | 11:46 a.m.

KANSAS CITY, Mo. -- Sprint Corp.'s new digital-age phone service sets the stage for a home communications utility that will one day encompass everything from phone and Internet service to home security monitoring, officials said.

Sprint's new ION -- Integrated On-Demand Network -- promises delivery of local and long-distance phone service and high-speed Internet access all through a single connection to home.

It also sets up the capability in the future for home security and home monitoring, Sprint executive Joan Jarrett said.

Sprint announced Monday that residential customers in three cities will get the first shot at the new digital service, which will allow users to talk on the phone, send a fax and check e-mail, all at the same time.

Sprint estimates consumers now pay $150 to $200 a month for such services and have to deal with three or four companies. It proposes a flat monthly rate, likely between $100 to $150, plus installation and equipment costs.

The nation's third-largest long-distance company said it has chosen Kansas City, Mo., Denver and Seattle to launch the service this fall. Sprint has said the service will be launched in Las Vegas and other cities early next year.

Also on Monday, U S West Inc. announced a three-city technical trial of its new service. U S West will integrate customers' telephone and Internet service with existing TV programming, all on a customer's home television screen.

The developments bring the long-awaited development of one-stop shopping for communications services a step closer to widespread availability.

"It's leading edge. Nobody else has done it, although AT&T will be in a position to do it as they roll out their cable service," said communications analyst Bert Heath of Z.D. Market Intelligence in La Jolla, Calif.

Sprint has been testing the service for the past two years at employees' homes in suburban Gardner, Kan.

Trials have also been conducted since January at large corporations in the Kansas City metropolitan area, including the Hallmark greeting cards business and Yellow Freight trucking.

The basic package includes four multiple, simultaneous voice lines, high-speed Internet access and virtually unlimited local and long-distance calls. The company said thousands of minutes of calling time would be covered by the monthly rate.

"You can have two faxes and two people talking at the same time while you download a big chunk of data from the Internet," said Joan Jarrett, director of emerging markets for Sprint consumer services.

The service is designed for people with home offices and for families and singles who enjoy rather than fear technology. Sprint estimates their ranks at 40 percent of U.S. households.

Every line has advanced features such as Caller ID and call forwarding. With a click of a computer key, consumers can control or change features on demand, such as adding a separate line for a teen-ager.

While the concept is attractive, the issue for Sprint is whether it can make money, said Heath. That's because of the cost of the final connection to a home, known in the industry as the "final mile."

"They'll have to lease lines from competitors to attach to the customer," Heath said. "They're not going to rewire the country."

Jarrett said Sprint has two plans for connecting to customers' homes.

One method will involve leasing copper phone lines from local phone companies and enhancing them.

The second way is by harnessing the high-speed broadband services of several wireless cable television companies, which Sprint has spent $1 billion acquiring in recent months. A home would receive the signals with a small satellite dish.

Sprint's acquired broadband lines cover 30 million households in 65 cities, or a quarter of the homes in the country, Jarrett said.

Heath said AT&T will upgrade its vast cable network to offer an equivalent type of service. "They're probably working on it as we speak," he said.

Mel Marten, a telecommunications analyst with Edward Jones in St. Louis, said Sprint would offer the service on a neighborhood by neighborhood basis and will be constrained by how quickly each phone company works with it.

While the functions and scope of the ION service are pretty revolutionary, the idea of offering bundle packages is not, Marten said. Most phone companies are working to offer the basics of local and long-distance service coupled with high-speed Internet access.

He said he expects the Baby Bells to roll out souped-up copper line service in limited markets this year. The so-called DSL or digital subscriber lines permit high-speed Internet access while you talk on the telephone.