Sprint ready for showdown with Cox

Kevin Rademacher

Monday, Jan. 12, 2004 | 10:53 a.m.

Gary Forsee, chief executive of Overland Park, Kan.-based Sprint Corp., says more telephone and video competition is coming to Southern Nevada.

Forsee, who spoke at the 2004 International Consumer Electronics Show in Las Vegas on Friday, said it is a matter of time before Cox Communications launches competitive local phone service here based on voice-over Internet technology.

That move would allow the dominant Las Vegas-area cable television provider to offer telephone service over its broadband Internet network.

Other companies already compete with Sprint -- largely for business customers -- but most do so by leasing Sprint's lines and equipment. The new Internet technology, however, would allow Cox to reach nearly all residential customers in the valley with little or no use of the Sprint system.

"It will happen, it's just a matter of when," Forsee said of Cox.

Steve Schorr, vice president for public and government affairs for Cox in Las Vegas, said this morning that telephone service from Cox is likely to happen here. The cable company already provides such service in several markets, including Phoenix and San Diego.

"The question we have to answer is, 'Does it make financial sense to make that kind of capital expenditure in Nevada?" Schorr said.

The biggest question is what kind of regulatory guidelines the state will place on Cox and Sprint if such a competitive market develops. Schorr said that without proper regulation, Sprint could establish a pricing structure that kills Cox's efforts.

"The state needs to make sure that there is the correct regulatory scheme in place to preserve competition," he said.

In the meantime, Forsee said Sprint will not sit quietly and wait for competition to come.

While providing few details, Forsee said Sprint plans its own Las Vegas-area television offering through a partnership with one of the major satellite providers.

That move would allow Sprint customers to purchase television service through the phone company and add it to the same bill that already includes land-line telephone, Internet and mobile telephone service.

"It allows us to compete," Forsee said.

Schorr said satellite providers are a significant source of competition, but said they can be overcome.

"It's still satellite service, and it doesn't provide other things that facilities-based companies like Cox can and does provide, like 1,100 employees in Las Vegas to take care of customers," he said.

The Greenspun family, owner of the Las Vegas Sun, is a minority investor in Cox's Las Vegas cable system. Cox is based in Atlanta.

Should it come from Cox in Las Vegas, Sprint is well aware of the benefits of voice-over Internet telephone service. In December, Sprint announced a partnership with Time Warner Cable to jointly offer Internet-based phone service for in as many as 17 markets nationwide.

Forsee said that deal was shored up by the experience the company had providing local phone service in Las Vegas.

"We will be using the background Sprint has as a local telecommunications provider here in Las Vegas," he said.

Nationally, Sprint said careful innovation will be the key to the company's success. Forsee said products like the camera phone, which Sprint pushed heavily in 2003, succeeded because they meet a need.

He said that while 30 million DVD players were sold in the first three years of that product's launch, 60 million camera phones were sold last year alone.

"Picture mail sells because, in many cases, it makes consumers more efficient," Forsee said.

The company also is moving in on rival Nextel's walkie-talkie product. The push-to-talk product was launched by Sprint in November and will be heavily advertised in February, said Len Lauer, Sprint's chief operating officer and head of the company's PCS unit.