Sprint ION service still not ready to go
It's been almost a year since Sprint's flashy announcement of its all-in-one high-speed Internet, voice, and data service, but the offering is still more buzz than bang.
The company today reiterated ambitious investment plans for its ION, or Integrated On-Demand Network, and this week ramped up a $30 million advertising campaign largely aimed at touting the benefits of converged networks to individuals and small businesses.
Yet only seven large business customers are now using the service--which isn't yet available in its complete form--even while Sprint continues with its network investment plans.
Analysts say the company has consistently made promises for the network that precede its ability to deliver by up to a year, and is now doing the same with its barrage of consumer-targeted advertising.
But branding the network before it is ready may be the right decision, they say.
"What they're doing is touting things six months to a year ahead of when they will be offered," said Peter Jarich, a telecommunications analyst with the Strategis Group. "It's part of building up the anticipation."
Sprint isn't alone in driving its services cart before the horse. MCI WorldCom and AT&T followed Sprint's offerings with their own versions of an integrated voice and data system, called On Net and INC, or Integrated Network Connect, respectively.
Both long distance companies have made some progress in rolling out pieces of the services, either in specific geographic areas or in piecemeal parts, but not one company has yet delivered a complete, all-in-one service, analysts said.
Sprint took the lead in the converged-network buzz game last June, promising integrated voice, data, Internet, and ultimately video services with a single connection. After testing some of the features with customers last year, the company began to mass market the services in January.
But the seven companies currently using the network don't yet have a full range of services. In a conference call today, CFO Arthur Krause said that local phone service wouldn't be built in to the network until later in the second quarter of this year.
Complete network services are scheduled to be available to large businesses nationwide by the end of the year or the first quarter of 2000, added company spokesman Russ Robinson
In the meantime, the company is moving to build up the infrastructure needed to support its promises.
Krause said that the company would spend between $600 million and $700 million in capital investments this year. Most of the investments would come in the latter half of the year, he added.
The focus will be to roll out the access systems needed to bring small businesses and consumers on board. The company plans to have high-speed digital subscriber line services, or DSL, installed in about 500 phone company central offices around the country by the end of the year, doubling those levels by mid-2000.
Sprint also bought the People's Choice wireless cable company last week, and plans to use the firm's services to cover ION subscribers in Detroit, Chicago, Phoenix, and several other metropolitan areas.
Consumers turn to wait
ION's consumer side, which is still in a very early trial stage with some 30 families in Kansas City, is now being given the same pump-priming treatment as the business features got last year.
Consumers and small businesses tempted by $30 million TV ad campaign may have a long wait ahead of them, however. Robinson said that a small business "research project" would begin this summer, and that consumer service would roll out at the end of this year.
Some analysts worry that this bit-by-bit effort to reach households and small business needs more focus, however.
"They don't seem to have any coherent strategy for getting to the last mile," said Zia Daniell Widger, a telecommunications analyst with Jupiter Communications. "They just seem to be doing it piecemeal, not really establishing any process."
But if the reality of the service has lagged the company's glowing promises, some analysts say Sprint is still delivering.
"Sprint has done a good job of focusing in one area, and putting money into it," the Strategis Group's Jarich said. "They're building a buzz. They've got a lead over MCI and AT&T."