As the U.S. economy slows, and growth in residential long-distance voice service diminishes, Sprint Corp. is searching far and wide for high-end customers, expecting to find them in the business capitals of Asia and Europe.
For corporate customers, the international expansion means that increasingly there will be one point of contact to deliver services to offices located across the globe.
Following the lead of rivals AT&T Corp. and WorldCom Inc., Sprint is turning away from its slow-growth (but still profitable) residential business and instead focusing on broadband data services for the enterprise.
The Kansas City, Mo., carrier is stretching its Internet backbone into more overseas markets, aiming to connect 13 countries in Europe and Asia before years end and 35 countries before 2004.
The IP network expansion contributes to the companys larger strategic plan to collect half its revenues by 2003 from data and broadband services, according to Len Lauer, president of Sprints Global Business Markets Group.
Sprints enterprise services include IP VPNs (virtual private networks), managed routers and managed firewalls, among others. Today, the carrier offers dedicated IP to 30 countries and Internet VPN to 69 countries. By the end of the year, the IP network is slated to provide 10G-bps connections between key business locations.
For its European headquarters, Sprint chose London, where its first Internet node is located. The IP network is connected to the Internet backbone in the United States via undersea cable systems, some of which Sprint partially owns.
Not wishing to neglect small-business clients, last week Sprint also launched a customer loyalty program. Called Sprint Business Rewards, the program awards points for dollars spent, which can be redeemed for free long-distance service, merchandise, gift certificates or travel packages. Customers who spend $60 or more per month are automatically enrolled.
"This is very consistent with what [Sprints] enterprise customers want to hear," said Ken McGee, an analyst with Gartner Group Inc. in Stamford, Conn. "There remains, and will forever remain, an appetite for as few service providers as possible [to serve an individual customer]." According to McGee, the three top long-distance providers offer more or less equivalent services domestically, and what will differentiate them is the ability to offer those same services in other markets.
While its unlikely enterprise customers will be able to rely on a single carrier to provide all telecommunications services worldwide, increasingly they will be able to turn to their primary carrier to coordinate services with other providers, according to McGee.
"We will never see, in our lifetime, one carrier providing all services to all customers," he said. "What we will see is a provider who will serve as an agent in other countries. People are shopping for the wrong thing. Theyre shopping for a global provider, when they should be shopping for a global integrator."