Sprint unveils 1-line service Single telephone line will also offer fax, Internet connections

June 03, 1998|By Mark Ribbing | Mark Ribbing,SUN STAFF

Sprint Corp., the nation's No. 3 long-distance company, yesterday introduced a new service designed to allow customers to get simultaneous phone, fax and Internet service from a single phone line.

However, critics said Sprint's splashy introduction of the new service was more about marketing than true technological advancement.

In the wake of massive deregulation and industry change, telecommunications companies have vied to offer business and residential customers one-stop shopping: long-distance and local telephone services from a single carrier issuing a single bill.

Sprint touted the service, called Integrated On-Demand Network (ION), as the realization of that ideal. The company said that ION could be used for local as well as for long-distance calls, along with video conferencing and super-fast Internet access.

Sprint said customers using the service would no longer need to get additional phone lines if they wish to talk on the phone and use the Internet at the same time.

According to Sprint, the high capacity of the ION networks would ensure that all of this could be delivered at relatively low cost: The expense to Sprint of delivering typical voice calls would drop 70 percent, while the cost of providing a video conference would cost less than providing a normal domestic long-distance voice call does today.

Sprint said it was not yet sure whether these savings would be passed on to consumers. ION customers would purchase a special meter to tally their use of the system.

"Today, Sprint is ushering in an entirely new generation of integrated communication services," Sprint's chairman and chief executive officer, William T. Esrey, said at a news conference in New York. The company's headquarters is in Westwood, Kan.

Sprint said that five years of confidential research and $2 billion of investment went into ION, and that the service will be available to large businesses later this year, with broader rollouts to the business and residential markets by late 1999.

The initial customers will be Coastal States Management, Ernst & Young LLP, Hallmark Cards Inc., Silicon Graphics Inc., Sysco Corp. and Tandy Corp. Sprint has been testing the system secretly for the past year.

In yesterday's trading, Sprint shares rose 50 cents to close at $72.4375.

Sprint's competitors -- and some independent analysts -- said the company is no further along the path toward integrated services than other major communications firms.

"It sounds very similar to what I hear from other phone companies," Jeffrey Kagan, an Atlanta-based telecommunications analyst, said of ION. "They just did a hell of a job promoting it."

AT&T Corp. and MCI Communications Corp., the top two long-distance carriers, declined to make formal statements about Sprint's announcement, but both said their own efforts to combine voice and data are at least as far along as Sprint's.

MCI's project, known as Vault, was announced in January 1997. The company said it does not yet know when this integrated-network plan would be put on the market.

AT&T, for its part, introduced its own combined voice and data system in January and is currently trying it out on a handful of business clients, with a broader business rollout expected later this year. "We think we're ahead of them," AT&T spokesman Wayne Jackson said of Sprint.

David Goodtree, an analyst with Forrester Research Inc. in Cambridge, Mass., called the ION announcement "smoke and mirrors." He said Sprint might be using the promise of a future product to draw attention away from the current difficulties that it and other established carriers are having in updating their networks.

Sprint disputed such claims, pointing to its track record as an innovator. Sydney Shaw, a Sprint spokeswoman, said, "When we rolled out fiber-optic networks, people scratched their heads. But they ended up scrambling to catch up, because we were right."

Pub Date: 6/03/98

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