Sprint Retooling Its DSL Image

It appears Sprint is making a go with high-speed wireline Internet access
again, according to an announcement by officials Monday.

This time around, however, officials look to have a more positive impact on
their bottom line, aggressively pushing business-class services and
avoiding the residential market almost entirely.

Currently available in 12 markets nationwide, Sprint Business DSL is
rolling out service in 10 others with service-level agreements (SLAs) that
are light-years beyond what they could provide in the past.

Guaranteeing a 45-day installation time and uptime at 99.9 percent, Sprint
is hoping to catch fire with the lucrative business owner demographic
around the nation. If the installation window passes and the service isn’t
hooked up, Sprint promises to rebate 50 percent of the first month’s
charge. And if service is interrupted, 1/30th of the monthly charge will
be discounted. The company is also touting a money-back guarantee if the
user is completely satisfied after 90 days.

Todd Townsend, Sprint assistant vice president of small business marketing,
said businesses today depend on reliable and super-fast connections to get
online today.

“Sprint recognizes this and is providing both installation and performance
guarantees to give customers peace of mind so they can continue to focus on
their business and their bottom line, not on managing technology,” Townsend

Notably absent from Monday’s announcement was mention of its residential
DSL service, a program that has languished since DSL service was first
introduced in late 1998.

The long-distance telephone company already offers a fixed wireless
Internet option for residential customers in eight states around the
country, in addition to its nationwide PCS digital phone service.

In 1998, Sprint had big plans for its digital subscriber line (DSL)
rollout. Hooked to its integrated on-demand network (ION), officials
expected to be a major player in the bundled services department. With
AT&T as its primary competitor, the company wanted to be one of the first
to offer bundled long-distance, local (using voice over DSL), and data
services, bypassing
the local exchange carriers (LECs) entirely.

Confidently predicting 35 cities in two years, the company soon found out
that the costs involved with a nationwide DSL buildup were not
insignificant. That, coupled with the slim profit margins for DSL service
(especially residential service), took the starch out of even the most
optimistic projections. Today, consumer DSL service for Sprint customers is
available in only eight states.

A spokesperson for Sprint said that while the company expects to deploy in
more than 35 markets throughout the U.S. by the end of 2001, it has been
tapped for business DSL use only. The spokesperson was uncertain if
residential service would expand with its business half.

It’s much more profitable for Sprint to offer DSL to business customers. A
person need only look at the largely-futile efforts of national data
competitive local exchange carriers (DLECs) like now-defunct NorthPoint
Communications, and Rhythms NetConnections and Covad Communications, which
are on the ropes, financially.

All three catered to the residential market, and all three went through
phenomenal cash burns to deploy as much as they did before funding dried
up. Their goal from the beginning was to achieve enough market share to
make offering residential DSL profitable.

It’s obviously a goal Sprint doesn’t want to worry about, thus the
aggressive move to ship out business DSL service and let residential
service lag, although the company is taking steps to make its current consumer service more profitable.

Sprint now offers business DSL in the following markets: Baltimore;
Chicago; Orlando, Ft. Lauderdale and Miami, FL; Minneapolis, MN;
Raleigh/Durham, NC; Sacramento, San Francisco, Oakland, San Jose, Palo
Alto, Los Angeles, and Orange County, CA; Dallas/Fort Worth, Austin,
Houston, Irving/Plano, TX; Kansas City; and Seattle.

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