The telecommunications provider also announced a new wireless service with the United Kingdom's Virgin Group, intended to enhance its appeal in the youth market.
Sprintthe prepaid Internet service two years ago, pitching it to consumers who were looking to trim their monthly bills in tight economic times. The service has been available at 7-Eleven stores since December, and Sprint spokeswoman Angie Makkyla said it was "too early to tell" how business is doing.
Starting Monday, more than 300 Kum & Go convenience stores throughout the Midwest will add Sprint's prepaid Internet disks to their shelves. Customers can buy the disks, take them to a computer and dial into the Internet with a special toll-free number, said Kum & Go spokesman Chad Breheny.
The service includes fixed amounts of access and free e-mail. Sprint charges $9.99 for eight hours of access, $19.99 for 20 hours, and $29.99 for 33 hours.
"Customers have responded to the value and convenience of prepaid Internet because it allows them to access the Internet from any PC, anywhere in the United States and only pay for what they use," Sprint marketing manager Terri Truesdale-Fraser said in a statement.
The service will appeal to travelers, people without credit and those who don't use the Internet frequently, said Henry Goldberg, an analyst with research firm In-Stat/MDR.
"About 19 percent of dial-up users spend less than eight hours a month online," Goldberg said. Though Sprint's service will lower the cost for these people, it will still compete with cheaper Internet service providers like NetZero, which offers 10 hours of service a month for free, Goldberg added.
In-Stat/MDR predicted in November that the prepaid Internet services market would grow from $10 million in 2001 to $280 million in 2005.
Sprint isn't the only company to offer "pay-as-you-go" services. AT&T and smaller companies such as Slingshot Communications, MaGlobe and Pine Creek Systems all offer similar services. AT&T offers CDs at Eckerd drug stores and at WH Smith stores in several airports, and has plans to offer the cards in all the locations in which it sells prepaid calling cards, Goldberg said.
Sprint's move into the prepaid Internet market parallels its efforts to sell prepaid wireless access. As growth in the company's traditional long-distance and wireless services begins to level off, analysts say services such as prepaid Net access are essential to keeping business strong.
"Every traveling professional and 'twenty-something' has a phone, forcing carriers to seek alternative subscriber bases to continue adding new customers," wrote Knox Bricken, an analyst with researcher Yankee Group, in a recent report.
Analysts have also seen Sprint's access service as part of an effort to target the youth market. To that end, Sprint and the Virgin Group said they plan to launch a new national wireless service.
The two companies will invest up to $150 million to launch Virgin Mobile USA by midyear. Sprint and Virgin will have equal control over the venture.
"Sprint is committed to clearly and efficiently penetrating the under-30 pay-as-you-go market in the U.S.," said Charles Levine, president of Sprint's PCS division, in a statement.