Sprint starts race in Europe, Asia - again
The company announced Tuesday it plans to build its own Internet backbone so it can launch Sprint services in 35 different countries in Asia and Europe by 2003.
The company already has a small presence in London and 14 other international locations. Using that as a base, it hopes to expand into key European and Asian markets in France, Germany, Holland, Italy, Sweden, Japan and China, company executives said.
Sprint's pending expansion had been expected for some time and didn't come soon enough for some analysts. Sprint had been part of Global One, a partnership with Deutsche Telekom and France Telecom. But Sprint pulled out of that agreement after it announced plans to merge with WorldCom.
But then those merger plans fell through because of regulatory problems, leaving Sprint with no international presence or plans.
"They really had no choice. They had to put together something of an international plan," said David Neil, vice president of network services for the Gartner Group. " I would have liked to have seen them do it sooner than this."
Regardless of the timing, Sprint is about to get into a market that is so crowded that some European ISPs are already facing the same type of market pressures that have slowed most technology industries in the United States, said Lars Godel, a Forrester Research telecom analyst in Amsterdam.
"It will still be tough, whether they build their own network or not," he said. "It'll be good for the users though. It'll give them more choice."
But the two analysts did applaud Sprint's expansion method. European and Asian markets are already experiencing a glut of bandwidth availability. Sprint apparently plans to lease some of this "dark fiber"--an industry term for fiber-optic cable that is already built but not being used--and build Internet relay devices on top of that, the analysts said.
"Right now, there is an oversupply of network facilities in Europe," Neil said. "Network cost is really quite cheap because of the oversupply."
Sprint is also banking on two other construction projects. Sprint says it partially owns most of the major public undersea cable systems and two under construction right now.
The expansion plans were made public less than a week after the No. 3 U.S. telephone service provider unveiled a bad fourth-quarter report and a dim forecast for 2001.
Last week, the Westwood, Kan., company lowered its previous 2001 earnings forecast by 10 cents a share. It also reported that its fourth-quarter profits fell 77 percent.