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 THE STAT 26Percentage of wireless customers who use their cell phones to take picturesMore Vitals
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MARCH 18, 2003 SPECIAL REPORT: THE SQUEEZE ON WIRELESS Looking for "Rational Economics" [Page 2 of 2]
A: Messaging is the closest thing. In the consumer market, text messaging and instant messaging are very popular. In the [corporate] space, short text messaging is taking off, as is [cell-phone] access to e-mail. You're also going to see a lot more use of cameras in cell phones, and multimedia messaging. You take a picture and send it to friends -- and you can also add a short text message or a voice mail. You get immediate gratification. Insurance adjusters can take pictures of [damaged property] and send them back to the office immediately. Photos could be used as an I.D.: When I call you, my face would come up on your screen. Q: Many corporate users are dissatisfied with [cell-phone] data services. What are you doing to resolve that? A: We need to develop a plug-and-play environment that would allow an enterprise to take its existing applications and make them accessible to mobile users. Today, there are a lot of issues around security, authentication of the device, and [image] compression. But we're developing an environment, which will become available in 2004, that would take care of these issues and also enable location-based services. Chief information officers will be able to implement mobile applications quickly and at less cost. Q: Some analysts believe that alternative wireless technologies like Wi-Fi will take a bite out of your data revenue. Do you see Wi-Fi as a competitor? A: Wi-Fi is very limited in its [area of] coverage. No one has yet been successful at monetizing the public Wi-Fi networks. We're working on technology that would allow a user's phone or laptop to smoothly transition from Wi-Fi to our network. We very much see Wi-Fi as being compatible with our advanced wireless network. Q: Do you view any emerging technologies as competitive threats? A: The only area I would worry about is voice over Internet protocol (VoIP) [enabling voice calls to travel via the Internet]. In 18 months to two years, some mobile-phone traffic could go through the private Wi-Fi network and onto the IP network, and that's somewhat of a threat [because it would take away wireless revenues]. Still, Sprint is positioned very well because we're an integrated company, and we'll be providing IP services to businesses and homes [and will take advantage of this migration]. Q: How else do you hope to take advantage of the fact that your parent, Sprint Corp. (FON ), offers long-distance service? A: Short term, we'll be marketing a package of local and long-distance services and aggressively selling that to our wireless customer base. Next, we'll go to our local-service customers and ask them to switch to us completely as wireless customers. We'll come out with pricing that's the same no matter what kind of call they're making -- local, long-distance landline, or wireless. The reason we haven't rolled this out yet is that we want to also offer follow-me type services, where we can find you wherever you are, [and we're still developing that technology]. Today, someone calls your home and has to leave a message on the answering machine. But in 2004, we'll be able to locate you and forward your calls. We can make you more accessible, if you desire, and allow you to be agnostic as to what service you're using. Q: How do you think this idea of offering integrated services will affect consolidation? A: Consolidation isn't a question of if, but when and who. We believe that we're positioned very well by having the assets that we think will differentiate us and a model that we think most carriers will move to. It's hard to see, several years out, the viability of a wireless company on its own. Customers will want to see integration of services. Q: If customers don't differentiate between wireless and local calling, does it mean that per-minute prices are going to drop? A: If anything, we see revenue going up for us. Today, we're the wireless provider to many houses. For some homes, we're their long-distance provider. With this bundled approach, if we already have a customer's wireless business, we can also pick up their local and long-distance business. It's more revenue for us. Also, it would reduce customer churn. And our customer-acquisition costs would be lower. Q: Talking about churn: Are you worried about wireless-number portability? Legislation that would allow customers to keep their numbers as they change service providers is expected to pass this fall. A: We're concerned about it. But our largest concern is that if the law is implemented, it will put us at a competitive disadvantage against local-service providers. Most wireless numbers are assigned in a different local calling area than your landline number. So say that you want to drop your regular phone service and go totally wireless, and you want to keep your landline number, which most people know you by. You call Sprint and ask that we port over your regular phone number as your wireless number. We might not be able to do that, since most wireless phone numbers aren't in the same calling area. We're also concerned that customers would be disappointed with their experience. It's going to be about a three-day process to port a number from one wireless carrier to another. Or, if you're in the same local calling area, to port your regular phone line to your wireless phone. But wireless customers today are very much conditioned to have their phone activated right away when they go into a store. With wireless local number portability, it will be a very confusing process. Plus, the investment the industry is making to implement this is more than $1 billion. The more we focus on government mandates like this, the less we can focus on improving our customer care and quality of service.
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