Sept. 11, 2000

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Sprint's Future Strategy Embraces The Net

By Elisabeth Goodridge

ith the proposed WorldCom merger dead, thanks largely to the Federal Communications Commission, the IT department at Sprint may be breathing a slight sigh of relief. Free from the tedious integration of legacy systems that the consolidation would have required--integration endured by many competitors--the division faces an uncertain future.

"We're refocusing ourselves behind the go-it-alone strategy," says George Fuciu, Sprint's CIO and technology-services president. "We don't know anything different. In the 1980s, we announced we were going to offer the first all-fiber, all-digital network. No one believed us. In the '90s, we built the PCS Network. We did that ourselves, too."

The latest initiative is the release of its Integrated On-Demand Network, a service that bundles high-speed data with long-distance and local voice service in one broadband pipe. To meet the demands of the new system, Sprint's IT department underwent a major back-end overhaul, installing new enterprise applications and revamping its billing and network infrastructures. Offered to commercial and consumer markets, the ION service has been released in 12 markets as of August, with 20 planned by year's end.

"The mass personalization that ION offers is extremely exciting," business solutions VP Malcolm Petty says of the ION Web portal that lets subscribers add, remove, and change service options.

But some industry experts question how successful ION will be. Most companies, for instance, already receive services over multiple lines and through multiple providers, and are comfortable with that. Then there's the hesitancy to have any kind of service switch. "It's going to be a hard sell, but that doesn't mean it won't succeed," says Christine Heckart, president of TeleChoice, a telecom consulting firm. Whether it will be worthwhile to switch to one provider will depend on the cost and benefits to customers, Heckart says.

According to Fuciu, ION plays a part in Sprint's threefold strategy for the future. The company's focus will be on strong international growth, an aggressive strategy in the IP area (which includes ION), and increasing its data services offerings, the latest of which is Internet call waiting, which lets users check the identity of voice callers without logging off of a data session.

It's the Internet, in fact, that will be a driving force behind these initiatives. For both regular service options and ION, the Internet will provide a direct interface to customers, according to Petty.

"The Internet is a great way to expose customers to a wider array of services and reduce our costs by cutting down on those associated with other direct-interface channels," he says.

But creating the infrastructure to accomplish this will be costly. Sprint says technology-related spending is growing by 20% a year, and one of the biggest challenges the company faces is to see a return on its investment. "We've made the investment in infrastructure for our fiber network and ION," Petty says. "Now we need to leverage it." In one strategy to leverage the investment, Sprint's internal structure has become more focused on bundled broadband data services. "We're trying to reposition ourselves as a solutions provider," Petty says.

Ironically, all the investment in new services and internal infrastructure could make Sprint an attractive target for an outright takeover--possibly by Deutsche Telecom or another foreign carrier. Maybe those sighs of relief will blend with those of resignation.

Return to main story, "Telcos Aim To Offer More."

Illustration by Jeffrey Fisher

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