|Sprint unveils mobile Internet, spurring U.S. market|
DALLAS/NEW YORK, Aug 8 (Reuters) - Sprint PCS Group (NYSE:PCS - News) on Thursday said it will offer customers nationwide the ability to easily check e-mail and surf the Web from their mobile telephones, in what analysts consider this year's watershed event for the slow-changing U.S. wireless industry.
The introduction of coast-to-coast service by Sprint PCS, the fourth-largest U.S. mobile service provider, together with a range of new phones and competitively priced services, is seen as the big-bang event to jump start competition. Rivals, all of whom already offer limited versions of the mobile Internet, are set to respond with their own innovative, low- priced services.
In contrast to previous data communications services, which were slow and had limited features, the new networks promise Web connections at speeds similar to or faster than dialing up over standard telephone lines, as most Internet users now do. Sprint's service will allow customers to swap photos and download fast-paced games and eventually to watch video.
Describing the launch as the biggest thing since it first introduced digital mobile phone service in the mid-1990s, Sprint President Charles Levine said he hopes the service will make up for Sprint's dismal subscriber numbers last quarter.
"(Last quarter) humbled us. I don't really like being humbled," Levine told Reuters in an interview Thursday. "This will allow us to regain our competitive advantage and regain the lead that we've had" in attracting new subscribers.
Sprint PCS' launch of its new service, called PCS Vision, is considered by analysts to mark a major dividing point for the U.S. wireless industry, which lags behind Europe, Japan and South Korea. Competitors are racing to complete their own networks by year-end, creating a spirited rivalry for U.S. consumers ears -- and eyes -- with sleek new devices and innovative services.
In South Korea, the first country to launch the more advanced mobile services, 13 million of the nation's 30 million mobile users have converted to the faster phones since 2001. Some 1.6 million users have signed up so far in Japan. But Europeans have so far been slow to adopt similar new services.
Wireless operators are hoping demand for high-speed wireless data will be the next catalyst for growth in an industry in which voice-calling alone has run out of steam.
Analysts said Sprint PCS appeared to be making a good start with its wireless data offering, but added it was too early to predict its success, given the mixed record overseas.
"If it's really successful, it really does set the stage for Sprint PCS to gain meaningful market share," said Thomas Lee, an analyst with brokerage J.P. Morgan. "We're going to have to reserve real judgment until we actually see the consumer response."
Following the long-expected news, Sprint PCS shares rose 5 cents to $3.89 on the New York Stock Exchange by midday.
Sprint PCS, a unit of U.S. local and long distance phone service provider Sprint Corp.(NYSE:FON - News), said consumers on its new network can expect average data speeds of 50 kilobits to 70 kilobits per second -- the equivalent of Internet dial-up over phone lines. It has a peak speed of up to 144 kilobits per second.
PCS Vision will initially give customers the ability to take and send pictures, download games and ring-tones, send short text messages to friends or colleagues and surf popular Web sites like ESPN.com, Google and Amazon.com.
Customers who purchase a wireless access computer card will be able to surf the Web and check e-mail on their laptops or handheld PCs. Corporate customers can access applications like Microsoft Outlook scheduling software and Lotus Notes e-mail through cell phones, laptops and personal digital assistants.
Sprint PCS is introducing new service plans that cost between $49.99 to $119.99 that includes voice minutes and megabytes for data use. An introductory plan for $89.99 a month includes 2,000 voice minutes to use any time and two megabytes of data -- enough to send 100 e-mails, 100 instant messages and check out 100 Web sites according to the company.
Laptop computer users can sign up for monthly plans ranging from $49.99 to $119.99 for 20 megabytes to 120 megabytes of data. Unlimited access to data will run $49.99 for the first three months and $99.99 for the rest of the contract term.
"I suspect this is their first shot at what their price plans are going to be," said William Benton, wireless analyst with William Blair & Co., adding that Sprint may cut its prices, depending on rivals' responses and customer demand.
Sprint PCS is introducing the service with four mobile phone models with color screens, two wireless access PC add-on cards and a camera attachment. Prices range from $180 to $500 -- the widest selection of devices and offer the widest selection yet of phones and other devices compared with rivals. New phones are supplied by South Korea's Samsung (KSE:05930.KS - News) and LG Electronics (KSE:64010.KS - News), Japan's Sanyo (Tokyo:6764.T - News) and Handspring (NasdaqNM:HAND - News), a U.S. maker of Palm-based handheld computers.
It expects to launch three more phones, as well as another wireless access card, over the next few weeks.
"The different number of phones will be the key to their success," said Herschel Shosteck, chairman of Washington-area based wireless consulting firm the Shosteck Group.
Sprint's service relies on technology from Qualcomm Inc. (NasdaqNM:QCOM - News) known as Code Division Multiple Access (CDMA) wireless technology, the dominant standard in the United States. The advanced version is known by the mouthful CDMA2000 1X.
The nation's largest operator Verizon Wireless (NYSE:VZ - News; London:VOD.L - News), which is currently rolling out its advanced network, was the first national operator to launch CDMA2000 1X, which it refers to by the easier-to-understand name Express Network.
Cingular Wireless (NYSE:BLS - News; NYSE:SBC - News) and AT&T Wireless Services Inc. (NYSE:AWE - News), the No. 2 and No. 3 wireless operators, are upgrading their phone networks to a slightly slower next- generation system based on the world's dominant wireless technology, Global System for Mobile Communications (GSM).
-- With additional reporting by Eric Auchard in New York