ORLANDO, Fla.--Sprint Nextel wants to be the provider of mobile broadband.
In the highly competitive mobile phone business, it's not easy to stand out from the crowd. Sprint Nextel, the No. 3 mobile operator in the U.S., is relying on new data services to spur growth. The company has recently revealed more details around its plan to build a supercharged 4G network using WiMax.
It's also working hard to attract mainstream consumers to its services by lowering the prices on music downloads to 99 cents and including navigation services for free with certain data plans.
The company is doing all of this to attract new customers to its service and entice existing ones to stay. Here at the CTIA Wireless tradeshow, CNET News.com sat down this week with John Burris, Sprint's vice president of wireless data services, to discuss the company's strategy for the future.
Q: Sprint is making a big push with its 4G WiMax network initiative lately. Can you briefly describe for me the strategy?
Burris: We believe we have been a leader in wireless data services and WiMax is a continuation of that history. We also have one of the most advantageous pieces of spectrum that is great for the WiMax service, so it makes sense for us to use that technology.
Our strategy has a couple of prongs. First, there is the continuation of improving the network and making it faster and faster, so that you'll be able to have devices doing really cool stuff like transmitting TV in high definition. Another part of the strategy is putting WiMax chips in devices like a Sony video camera or a personal game device or in all PCs or set-top boxes.
I always think of it this way, "What will it take for my dad or grandfather to use a service?" It's important to find a low-risk way of allowing people to try out new services.
Sprint just lowered its pricing for music. Why? Were you finding it difficult to compete with services like Apple's iTunes?
Burris: It really had little to do with Apple. We had always planned to go big in music in 2007. And we wanted everything in place so there were no hurdles to keep people from trying it. We wanted Sprint to be the place you go to grow your catalog.
Sprint also bundled for free its TeleNav GPS navigation service into data packages costing over $20. Why?
Burris: We think that consumers need to get more for less. When we first launch a service, we target early adopters. They tend to use a service more heavily, and they might see real value in a $9 per month price point. But once you penetrate that market, you have to get creative about reaching the other 40 percent. And with services like navigation and location-based search, for example, most people won't need it everyday. So we created a pay-per-day model for the mass market.
I always think of it this way, "What will it take for my dad or grandfather to use a service?" It's important to find a low-risk way of allowing people to try out new services. It's also important that the bills are not complicated so people understand what they're paying for.
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Will advertising help with any of these cost issues? And how does Sprint envision using advertising to supplement revenue?
Burris: Yes, we have a model in place that lets us provide a compelling user experience and also lets us monetize services through advertising. It seems obvious to integrate advertising into mobile TV. But it might be a little less for other things like full music tracks. That said, there is a long history of advertising on the radio. And there is a certain understanding with streaming content that you could listen to an advertisement after five songs or something. We're working carefully to integrate advertising where and how it makes sense.
Speaking of Apple, they decided to make the (iPhone) device available on AT&T/Cingular's network first. Will Sprint try to get the iPhone at some point?
Burris: We don't talk about future products roadmaps or plans. We feel really good about the lineup we have today. We've announced this week at CTIA that we are carrying the Samsung Upstage for $149. We also have some other music phones that are in the $50 or less range that let you download music over-the-air, which is something the iPhone won't do.
Sprint had a difficult first quarter in 2007. And the company seems to be struggling with its reputation in terms of the quality of its network. What are you doing to remedy this?
Burris: The perception is that we are still behind, but the reality is that we have invested $6 billion to $7 billion in the network, and we continue to spend to build out the network. Whether you have the broadest footprint or the best coverage, there are always certain pockets where it's hard to get service. It depends on where you live.
But we need to educate customers and subscribers where the coverage is. It's funny, Sprint will sometimes rank lower than our mobile virtual network operator, or MVNO, partners, because that's the perception, which doesn't make sense. Making calls is still a priority and that has to work. But we also want to build on our history of offering great data and digital media products.
I don't think we, as an industry, have gotten it right yet. The next version of our service will look a lot different.
It's also important to be in line with our customers' expectations, whether that means meeting the right price point or having an extensive catalog of songs or even having an open network that allows people to side-load music.
A lot of the issues that are causing people to leave the network have been associated with Nextel. Is Sprint phasing out this network?
Burris: No, we wouldn't use the term "phasing out." But we are upgrading those subscribers to converged CDMA and iDEN handsets. This gives subscribers the best of both worlds. But the iDEN network isn't going away. We aren't abandoning anyone. Customers using Nextel phones will still be able to use the network.
There has been so much talk recently about watching TV on cell phones. Do you think people really want to watch TV on that tiny screen?
Burris: Americans love media; so I'm convinced they will want to see it on their cell phones. But mobile phones will never be a substitute for a big plasma TV.
We've been bullish on mobile TV since we launched the Mobi TV service in 2003 on our 1xEV-DO network. There are still people enjoying one- to two- to three-frames-per-second video. And now with EV-DO and faster handsets the experience is getting even better.
What needs to happen to entice the mass market to subscribe to mobile TV services?
Burris: First, we need better content. Viacom, for example, is developing true high-quality TV for mobile with programming from MTV to Comedy Central to Nickelodeon. We're moving beyond the teasers and promotional clips. And I think once people get to stuff they want to watch they will watch it in a real meaningful way.
We also aren't done improving the service. And we'll see things like putting the cable electronic programming guide on the phones as part of our partnership with the cable companies, so it looks like what you have at home. And then there are network improvements for faster networks, as well as faster handsets.
We've seen great uptake with our early mobile video services. But it's still early. And I don't think we, as an industry, have gotten it right yet. The next version of our service will look a lot different.
AT&T and Verizon Wireless plan to use Qualcomm's MediaFlo network to deliver live mobile TV. Is Sprint planning to use MediaFlo, too?
Burris: We did a trial in Las Vegas with MediaFlo. But we feel confident about our own roadmap.
What is that roadmap?
Burris: We'll continue to improve the CDMA and EV-DO networks as far as we can. And we look forward to using the 4G network. But we aren't closing the door on broadcast TV or MediaFlo. You can do broadcast or multicast with EV-DO Rev A. And theoretically we can get 99 stations of live TV on handsets using our EV-DO technology.
But right now, broadcast isn't really necessary. To really need broadcast, the video needs to be streamed concurrently among many users in a given cell. Our experience indicates that's not how people are watching mobile TV. People's interests are spread across lots of different content. And they're watching more on-demand shows rather than broadcast or streaming mobile TV. So we don't see the need quite yet. But if the need comes some day, then we will look at broadcast or multicast technologies.