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Telephone services

Sprint Introduces Revolutionary New Telephone Service with Integrated On-Demand Network (ION)

Strategic Insights

— 2 min read

Sprint, the No. 3 long-distance company, has announced a radical new telephone service that converges voice, video, and data into a single high-speed connection. The Integrated On-Demand Network (ION) service will enable customers to use multiple services simultaneously, such as talking, faxing, playing video games, and surfing the Internet, at speeds up to 100 times faster than conventional computer modems. This new service is based on "asynchronous transfer mode," or ATM, technology, which is already used by large corporations to transmit data and phone calls across the country.

Key Takeaways:

  • Sprint's ION service will provide a single high-speed connection for voice, video, and data, allowing customers to use multiple services simultaneously.
  • The service will be priced based on digital bits transmitted per month, rather than flat monthly or per-minute rates.
  • Usage will be monitored by an electronic box in a customer's home or office.
  • Sprint hopes to take advantage of the proliferation of communications in the American workplace and home.
  • The company expects to offer the service to 75% of the nation's population by late 1999.
  • The service will be initially available to businesses later this year, with plans to offer it to small and home-based businesses by early 1999 and to residential customers by late 1999.
  • Sprint's costs for delivering a typical voice phone call will drop by more than 70%, while video calls will be cheaper than typical long-distance calls today.
  • The company expects to target consumers who spend heavily on communications, with 16 million American households spending at least $110 per month on phone and online services.

Statistics:

  • Sprint spent $2 billion to develop its Integrated On-Demand Network (ION) service over the past five years.
  • The new service will reach speeds 100 times faster than conventional computer modems.
  • Sprint's costs for delivering a typical voice phone call will drop by more than 70%.
  • 16 million American households currently spend at least $110 per month on phone and online services.
  • Sprint's ION service will be available to 75% of the nation's population by late 1999.
  • The service will be initially available to businesses later this year, with plans to offer it to small and home-based businesses by early 1999 and to residential customers by late 1999.
  • Sprint's shares rose 50 cents to close at $72.43 3/4 a share on the New York Stock Exchange.

Sources:

  • The Associated Press
  • Sprint Corporation
  • Kagan Telecom Associates
  • Gartner Group
  • U S West
  • MCI
  • Ernst & Young
  • Silicon Graphics
  • Sysco Corp.

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