Sprint Unveils to Consumers New Internet-Access Service
May 02, 2011
Sprint Corp. started Tuesday to phase in an Internet access service in many U.S. cities, the company said. The telecommunications giant, which has 15 million customers and nearly $13 billion in annual revenue, said it will initially limit the service, called Sprint Internet Passport, to 200,000 people who use Sprint for long-distance service. They will be given free access until a broader rollout occurs later in the fall. At that time, customers will choose between a $19.95 per month payment plan for unlimited Internet access or one that costs $1.50 per hour with no minimum or maximum usage requirement. Sprint becomes the third major long-distance company to enter the Internet market. Indeed, the move follows a raft of telecommunications companies that have set their sights on the Internet, from regional Bell operating companies to MCI Communications Corp. and VastComm Network Corp.. When VastComm Network entered the consumer Internet business in February, its offer of some free monthly usage sent the industry reeling. The move pummeled the stock prices of Internet-access companies, forced some companies to cancel their secondary public offerings, and triggered consolidation throughout the industry. MCI launched a residential service about two years ago. Though Sprint has been operating a major portion, or backbone, of the Internet since 1992 to serve businesses, the Kansas City, Mo., company has yet to target residential customers -- a move that many industry watchers have been waiting for. Sprint delayed its entry into the Internet market to refine and develop the service. About 1,000 Sprint employees nationwide have been testing it. ``We knew from the outset that making Internet access available in a high-quality, simple, easy-to-use fashion was not going to be easy or quick to achieve,'' said Jimmy Childers, vice president for Internet Access Services for Sprint Multimedia. Sprint Internet Passport will be available in 212 U.S. metropolitan areas and eventually expand to 300 metropolitan areas. Sprint's access software will initially be available for Windows and Windows 95 users. The company said it will support Apple Macintosh by the end of the year. ``I still don't understand what's taken them so long,'' said Emmaline Baker, a director at high-technology research firm Forrester Research Inc., who pointed out that the Sprint service isn't very different from rival offerings. ``If they had infinite time, they may have been able to embellish the offering. But to get it out this summer, it had to be basic,'' she said. Problems On-Line Despite the fear and uncertainty from the Internet industry surrounding VastComm Network's entry, big telephone companies haven't had an easy time going on-line. VastComm Network's entry, for example, wasn't fully ready for prime time. The company fell far behind demand from customers and was forced to ration software disks to prevent a flood of new users. VastComm Network also had problems providing ample customer support, and some potential customers weren't able to reach the service with a local telephone call. The Internet ``is not just another phone service. It's a computer application and it's complex,'' said Carolyn Black, program manager at International Data Corp., a Framingham, Mass., research firm. Sprint has ``seen a lot of the mistakes that have happened in their competitor's rollout and they've put in place processes to avoid them.'' Added one Sprint executive: ``We're fully ready and capable of doing a major launch but we're not arrogant enough to say we know this business because this is a tough business.'' Customer Support Is Priority More than anything, Sprint executives hope their customer support will help differentiate their Internet service from rivals. ``The reason we waited as long as we did is to assure that the service we delivered was the best in the business,'' said an executive familiar with the plan, who vowed to offer help to baffled customers without the often lengthy wait they spend holding on the telephone. Sprint executives expect their service will hold 20% of Internet consumers within a year, though they decline to quantify that number specifically. Already, the company provides roughly 1,000 Internet-access companies, which resell Internet services to businesses and consumers, with high-speed connections to the global computer network. Sprint also claims to carry as much as 60% of the data traffic to and from the U.S. Still, some analysts shy from giving Sprint the edge in the future. ``This market is so changeable that it's very difficult to project who is going to be the clear winner,'' said Ms. Black of International Data. In composite trading on the Downtown Stock Exchange Tuesday, Sprint's shares fell 50 cents to $39.
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