Sprint leader touts new services, products

Friday, Jan. 11, 2002 | 11:05 a.m.

The chairman and chief executive officer of Sprint Corp. made the most of the national spotlight cast on him at the International Consumer Electronics Show Thursday with an entertaining hour-long commercial for the future of wireless communication.

William Esrey, the only CES keynote speaker who did not ask audience members to turn off their cellular telephones during his speech because "when I hear cell phones ring, I hear cash registers," spelled out Sprint's third-generation wireless project.

Esrey narrated on-stage demonstrations of new ways people will be able to use their wireless telephones with what is known as 3G.

In a question-and-answer session with journalists after the speech, Esrey reassured Las Vegas residents that just because Sprint's main push for 2002 will be in the wireless arena, the company doesn't intend to ignore its local telephone networks, including its dominant system in Southern Nevada.

"We feel we're in a great position in Las Vegas," Esrey said. "We plan to spend more than $850 million on the local system in Las Vegas over the next five years and we feel we have a very sophisticated customer base that is willing to try the new technology. That's one of the reasons Las Vegas is often used as a test market for us."

Cingular Wireless has found the same level of sophistication in Las Vegas and earlier this year introduced a cell phone not quite as complex as the 3G offerings, but capable of sending e-mail while using voice functions.

Las Vegas is one of the markets where Sprint is testing 3G, but the average customer won't have the hardware in hand to see it work. Esrey announced Thursday it has signed a wireless phone partnership with Hitachi Ltd., a deal for new 3G phones with Sanyo and a wireless gaming deal with THQ, a video game manufacturer.

Those deals will put new phones and services in the hands of customers when the $1.5 billion rollout of 3G occurs later this year. Esrey demonstrated the new uses with the help of 13 actors, including Brian Baker, the black trench coat-wearing "Sprint PCS guy" from the company's commercials.

Esrey and the actors showed how consumers could access a corporate Intranet site for information on shipments and inventories; send and receive graphics, including maps; transmit digital photos from phone to phone, including some with cameras built into the units; play video games; receive streamed video of news events -- all from a wireless device.

The first phase of Sprint's 3G technology will include phones capable of transmitting data at 144 kilobits per second. Most dial-up Internet connections move data at 56 kilobits per second. Within two years, the standard is expected to increase to 3 megabits, or 3 million kilobits, per second.

Esrey said a price standard has not been established by the company, but it is expected to be based on the amount of data transmitted. Therefore, sending large files, photographs and videos could be more expensive than standard voice transmissions, but Esrey said the company is working on package rates for digital transmissions.

He said the average wireless customer currently pays about $60 a month for service and it's uncertain how that would change when 3G comes on line.

"A lot of it is going to depend on a customer's needs and what services he uses," Esrey said.

Sprint is counting on wireless communications as part of the mix of products Las Vegans will buy as their needs increase.

A spokeswoman for Sprint in Las Vegas said the company currently has about 950,000 business and residential customer lines, but the growth rate is only about 1 percent a year. The reason: Many customers are replacing their second telephone lines with digital subscriber line technology -- DSL -- which gives users voice or data transmission capability on a single line. Many customers also are using wireless phones exclusively.

Much of Sprint's growth has been from existing customers adding new lines for computers or fax machines. Last year, Sprint's Las Vegas division had $485 million in revenue compared with $475 million in 2000. In the past three years, Overland Park, Kan.-based Sprint invested an average of $156 million a year to the Las Vegas operation, mostly to keep up with the city's growth.

While Sprint executives expect customers to gradually convert to 3G products when they become available, some experts are watching the development of the technology by Sprint and rivals Verizon Wireless, AT&T Wireless and Cingular.

Chris Ensign, senior industry analyst for the Personal Communications Industry Association, Alexandria, Va., said his organization surveyed wireless communications users worldwide to determine what types of services they would use and, more importantly, how much they would be willing to pay for them. He said 29 different types of services with enough potential customers to make them viable were identified.

The PCIA survey indicated young users were most comfortable with the various features available.

"Determining what customers will use from what they think they will use is the key," Ensign explained.

He said accessing the Internet with a cellular telephone isn't practical for browsing web pages, but there are some services that are provided online -- such as buying flowers or movie tickets -- that would be of interest to some customers.