Sprint Unveils Revolutionary $2 Billion Upgrade to Phone Network

Strategic Insights -

Sprint Corp.'s major overhaul to its phone network, dubbed the Integrated on Demand Network, promises to bring a wide array of functions to a single phone connection at lower prices. The upgrade, which has been five years in the making, will overturn the traditional system of basing phone charges on the distance a call travels, instead metering usage like an electric utility. This innovation could lead to average long-distance call prices plummeting to about 3 cents a minute.

Key Takeaways:

  • The Integrated on Demand Network will offer a wide range of functions, including videoconferencing, faxing, and advanced applications, all through a single connection and at lower prices.
  • The network will be able to transmit data up to 100 times faster than conventional modems and will serve as the "great equalizer" for small businesses, home offices, and telecommuters.
  • The upgrade aims to put control of bandwidth in the hands of customers, allowing them to add capacity and services as needed.
  • The network will also allow for video calls between family or business associates for less than the price of a long-distance call today and will bring up web pages almost instantly.
  • Sprint plans to use several options, including local exchange carriers, cable modems, and its nationwide digital wireless network, to bring the high-capacity bandwidth of its network directly to customers.
  • The upgrade is a major step towards the industry's goal of a full-service network that offers a mix of services, including video-on-demand, videoconferencing, and electronic shopping.

Statistics:

  • The Integrated on Demand Network is expected to cost $2 billion to implement.
  • The average price of a long-distance call could plummet to about 3 cents a minute.
  • Data traffic is doubling each year, with carriers currently sending voice and data by different transmission technologies.
  • By 2003, data traffic is expected to consume 80% of all telecommunications network capacity.
  • The cost to deliver a typical voice call will drop by more than 70% using the new technology.

Sources:

  • Sprint Corp.
  • Gartner Group, Ken McGee, analyst
  • Yankee Group, Boyd Peterson, analyst
  • Cox Communications
  • Bell Atlantic Corp.
  • Microsoft Corp.
  • U.S. West Corp.
  • AT&T Corp.
  • MCI Communications Corp.