Sprint Communications Co. has formed a new division for its
wireless cable holdings in an effort to bring broadband Internet services via MMDS to
market faster.
After spending about $917.8 million to acquire five
wireless cable companies this year, Sprint created the Broadband Wireless Group, which
will build the facilities and develop the wireless-broadband services the company will
deliver over its nationwide fixed-wireless network.
Sprint has tapped Timothy Sutton, formerly vice president
of technology and corporate development, to head the new unit. Sutton will report to Kevin
Brauer, president of Sprint's National Integrated Services and Sprint Business units.
The company went on an acquisition binge earlier this year,
purchasing People's Choice TV Corp. (PCTV), American Telecasting Inc., Transworld
Telecommunications Inc., VideotronUSA and WBS America LLC in deals valued at a combined
$917.8 million.
Sprint said it plans to use the
multichannel-multipoint-distribution-services spectrum of those companies to provide
customer connections to its Integrated On-Demand Network (ION), which will be launched in
35 markets this year.
The purchases give Sprint up to 200 megahertz of spectrum
in more than 65 markets covering more than 30 million households.
Spokesman Russ Robinson said that although all of the deals
have not been finalized yet, they are expected to close by October. He added that Sprint
expects to begin rolling out its fixed-wireless ION service in early 2000.
Robinson said Sprint will go head-to-head against
cable-modem and digital-subscriber-line services right from the outset. He added that
because many of the required towers are already built, the MMDS-based service will be
quicker, cheaper and more reliable than cable and regional Bell operating company
offerings.
Although pricing for the service has not yet been
determined, Robinson pointed to PCTV's existing high-speed-data service,
"SpeedChoice," which is priced at $54.95 per month, including all necessary
equipment, in Phoenix. SpeedChoice offers downstream speeds of 1.5 megabits per second and
upstream rates of 256 kilobits per second.
DSL offerings vary across the country, but on average, they
offer speeds of between 640 kbps and 7.6 mbps for between $49.95 and $200 per month.
Cable-modem service is primarily offered for about $40 per month.
"We haven't decided on the pricing yet, but it
has to be competitive with [cable and] DSL," Robinson said.
He added that although the company has not yet determined
how much it will spend on the build-out, most of those funds will be used for marketing
the service.
"We're going to do a lot of regional
marketing," Robinson said. "We will have regional marketing and service units in
each of the 65 markets."
Robinson added that Sprint also intends to bring on the
existing staffs of the companies it is acquiring -- totaling about 800 people -- and it
will have about 100 people in its Kansas City, Mo., headquarters devoted to the BWG.
According to Sprint, the BWG will be responsible for
building a broadband-fixed-wireless network in these markets and bringing to market a
high-speed Internet service for homes and businesses that will compete with similar
offerings from cable operators, RBOCs and competitive local-exchange carriers.
In addition, the BWG will work with Sprint's Consumer
Services Group, Sprint Business and other parts of its National Integrated Services unit
to roll out Sprint ION over the wireless infrastructure.
"To make the most of our significant investment in
broadband spectrum, we must get to market and begin winning customers as soon as
possible," Brauer said in a prepared statement. "This new organization is
designed to retain the entrepreneurial culture and ability to move quickly that the
companies we are purchasing bring to us, while at the same time leveraging Sprint's
existing resources."
Sprint also plans to use some of the management teams from
its wireless acquisitions to help further that strategy.
"We think that there is a lot of talent in the
companies we are buying, and we intend to use it as the nucleus of our new
organization," Sutton said in a prepared statement.
