Advertisement

High-Speed Sprint

PCS unit is set to have the fastest nationwide U.S. mobile network.

January 21, 2002|ELIZABETH DOUGLASS | TIMES STAFF WRITER

For Sprint PCS, it's pretty much come down to this: Make it big in wireless data, or prepare to be eaten.

William T. Esrey, chairman of parent Sprint Corp., prefers the former and is pressing ahead with aggressive upgrades that by July would produce the fastest coast-to-coast mobile data network system in the country.

For Kansas City, Mo.-based Sprint PCS, the upgrades represent its first real chance to catch up to the wireless giants that lead the U.S. market: Verizon Wireless, Cingular Wireless and AT&T Wireless. Sprint PCS' growth so far has been impressive, giving it a subscriber base that quintupled in the last five years to 14.4 million customers.

But in the booming U.S. wireless market, that's only good enough for fourth place. Verizon Wireless, the market leader, has more than twice as many customers, with 30 million.

Analysts expect the U.S. wireless industry to consolidate into two or three giant carriers, and they believe that Sprint PCS must move up the food chain in a hurry if it wants to be one of the survivors.

If Esrey is rattled, it isn't showing. Sprint PCS has converted two-thirds of its network to handle data at higher speeds, and that progress makes him nearly giddy over what he calls a "substantial" lead in the race toward third-generation mobile phone services. In the long-heralded 3G era, wireless connections can handle everything from video to e-mail attachments with relative ease.

"We're going to be there, nationwide, in July, and other people can't get there yet, so we will have one whale of a competitive advantage," Esrey said. "There are very few times in business when you get to stand on a mountain and look around, and not see a bunch of troops coming up behind you."

*

Reliance on Wireless Unit Has Parent at Risk

Analysts agree that Sprint PCS is ahead of the pack and has meaningful advantages in coming wireless data services. But it's unclear if that will be enough.

"They are betting the farm on 3G, so if that doesn't go well, that will probably be the end of Sprint PCS as an independent company," said Roger Wery, director of the communications group at PRTM, a technology consulting firm in Mountain View, Calif. "If 3G gets only niche adoption, it's going to be a disaster."

And a disaster for Sprint PCS will be a disaster for Sprint, which increasingly has relied on the wireless unit to offset plummeting long-distance revenue.

Sprint PCS and its competitors, stung by a tepid customer response to today's rudimentary mobile data services, are trying to make the next incarnation of data services faster, easier to use and coupled with applications compelling for both consumers and business users.

The first upgrade for Sprint PCS will give customers always-on connections to the Internet or corporate networks at speeds of up to 144 kilobits per second--more than double the speed of the fastest dial-up modem.

By the end of the year, the division will complete a second upgrade that will double the network's top speed to 288 kilobits per second, with a jump to movie-capable 3-megabit speeds tentatively set for 2004.

Customers who connect to Sprint PCS' wireless network through a laptop computer, hand-held device or mobile phone probably will get Internet connections about half that fast, because networks in live use typically perform well below their peak speeds.

Still, each of the first two upgrades will give Sprint PCS the fastest nationwide mobile phone network in the country.

Verizon Wireless, AT&T Wireless, Cingular and Nextel Communications also are upgrading their networks to handle e-mail, pictures and other data at faster speeds. Some have launched services in selected cities, but they lag far behind Sprint PCS in providing the improvements coast to coast.

"Sprint PCS is smaller, but they have a homogeneous network, they have cool devices and [company executives] made the right bet on technology," said PRTM's Wery.

But the investment by the carriers "is so massive and so broad, that they will have to have masses of customers to offset the cost," he said.

Few would have bet on Sprint PCS to lead the wireless pack six years ago. The company had no wireless spectrum, no cell sites, no customers and a shaky and unlikely partnership with three cable companies to pursue the newly expanding wireless market in the U.S.

In short order, the company bought up federal wireless licenses that cover most of the country, including more than 4,000 cities and communities and a population of 244 million.

Then, Esrey and others at Sprint PCS took the biggest risk of all: committing to build a national network using an unproven and controversial technology known as code division multiple access, or CDMA.

Advertisement
Los Angeles Times Articles
|
|
|