Sprint is unveiling its new services at the same time more traditional high-speed Internet services from telephone and cable companies are coming down in price. Competitors such as AT&T are also beginning to bundle their own Net and phone services for consumers.
Sprint already offers its Integrated On-demand Network (ION) service to businesses, albeit with limited success. Yet regardless whether Sprint can offer the latest in high-speed technology, analysts question whether the average consumer would be willing to pay $160 per month for the service.
The high price won't help in Sprint's attempt to grab mass market consumers. Even if ION offers the best high-speed Internet service around, it would be akin to a top-of-the-line Cadillac in a market where most people are still driving economy cars.
"It's going to be a difficult sell at first," said Michelle Pelino, an industry analyst with the Yankee Group. "It's a limited market right now."
From business to home
ION was originally created for businesses to use for direct Net connections, integrating a company's phone and Net service into a single network. It's been slow to catch on in the corporate world, however, and some analysts say Sprint has yet to articulate well what the ION's advantages really are.
In the consumer market, Sprint's ION will be based around a digital subscriber line (DSL) connection--the same technology that telephone companies use to provide simultaneous broadband Net connections and phone service over ordinary phone lines. The connection will provide data speeds of up to 8 mbps, or about 140 times faster than current 56K dial-up modems.
The $160 monthly fee also includes four voice or fax lines that can be turned on and off--essentially with the click of a mouse over the Net--and 2,200 minutes of either long distance or local calls.
Other phone companies are planning similar packaged services, however. BellSouth currently provides DSL and local phone service for about $84, and can add 5-cents per minute long distance service to the package for an added fee.
Analysts do say that if a consumer or small business needs multiple phone lines, a super-fast Net connection, and services like caller ID, Sprint's option might be cheaper than others. Yet the company concedes that ION isn't a product for everyone.
"ION is not a product for my mother," said Steve Lunceford, a company spokesman. "This is a product meant for high communicators," or people who spend far more than the average amount of time on the phone and online, he said.
The company is kicking off a print and online marketing campaign this week that focuses on those high-end consumers, aimed at pointing out the advantages of bundling phone and voice together.
ION's future may be called into question with the pendingof Sprint and MCI WorldCom. MCI has its own strategy for the consumer high-speed Net market, based on DSL, and has put less emphasis on the residential market.
But many analysts do applaud Sprint's technology, and say its tight integration of Net and phone products will eventually become the norm.
"ION is fairly visionary. It's the way things are headed," said Bart Taylor, an analyst with Giotto Perspectives, a broadband-focused consulting firm. "But this is not going to be an overnight phenomenon. This is going to take time."
Sprint's service will be available beginning next week in Seattle, Denver, and Kansas City, Missouri. Other cities will be added to the list early next year, along with a fixed wireless version of the service, Lunceford said.