Docstoc

Sprint PCS Winning the Wireless War

Document Sample
Sprint PCS Winning the Wireless War Powered By Docstoc
					Sprint PCS: Winning the Wireless War?


Professor: Dr. Keramati
Alireza khoshkbarforoushha
Ali hoseini dolatabadi
Outline
   Case Goal
   SPRINT PCS History
   Wireless Industry
   Technology
   Competition
   Substitute Technologies
   Threats of new entrants
   Wireless Applications
Case Goal
 It does not introduce a robust or innovative
  Business Model.
 It strives to draw difficult circumstances in
  witch Sprint PCS should survive and make
  money!
SPRINT PCS History
   Sprint had been a major player in the U.S.
    telecommunications industry for over one hundred
    years.
   Vision: providing high-speed, always-on voice and data
    connectivity via wire-line or wireless, all from a single
    provider.
   Sprint PCS could attribute much of its success to the
    strength of its parent company, Sprint, with an
    impressive 95 percent brand awareness.
SPRINT PCS History(cont.)
   In late 2001, Partnership with three major
    cable and TV companies to provide
    wireless personal communications service
    (PCS).


               15
                        40       Sprint
          15
                                 TCI
                                 Comcast
               30
                                 Cox Cable
SPRINT PCS History(cont.)
 Sprint PCS decided on CDMA as the basis for its
  infrastructure.
 CDMA is a digital protocol with voice and data
  transmission capabilities.
 It provided efficiency 10 to 12 times greater than
  analog technologies and twice that of other digital
  technologies.
 CDMA provided Sprint PCS a great competitive
  advantage.
SPRINT PCS History(cont.)

 In just 18 months, the company built and launched
  a nationwide voice network serving 150
  metropolitan markets.
 Revenues exploded, reaching $1.2 billion in only
  its second year of operation.
 Sprint PCS launched its Sprint PCS Wireless Web
  service allowing users to access e-mail and
  wireless-enabled Web pages from their phones.
SPRINT PCS History(cont.)
 As of September 2001, The Sprint PCS network
  covered 360 metropolitan areas and 85 % of the
  U.S. population.
 The company’s total customer base had reached
  11.82 million subscribers.
 Key Problem: Despite massive industry growth
  projections, adoption rates were low with only 10
  percent of Sprint PCS customers using its
  wireless Internet capabilities.

                              Opportunity?
Wireless Industry
   In 2001, the wireless market for voice services was
    maturing.
   As wireless phone penetration approached saturation
    levels, companies should decide continue to focus on
    voice or diversify into data services.
    Technology
   By mid-2001, several wireless technologies were
  in existence:
 Cellular technology
    ◦ 1G
      Analog cellphone standards
    ◦ 2G
      Radio signals in 2G networks are digital
    ◦ 3G
      3G technologies enable network operators to offer users
       a wider range services: wireless voice telephony, video
       calls, and broadband wireless data.
   Satellite technology
   Wireless LAN.
COMPETITION
   Major U.S. Wireless Telecommunications Firms

               To be first in customer experience
COMPETITION(cont.)
 Each U.S. wireless competitor faced a different
  migration path to 3G implementation
 For Sprint and Verizon, which used CDMA
  technology, the upgrade process to CDMA2000
  1x was straightforward.
 For AT&T and Cingular, which used TDMA or
  GSM technology, the upgrade path to full-blown
  3G was not as straightforward.
SUBSTITUTE TECHNOLOGIES

 Two of the more prominent ones were wireless e-
  mail devices, such as:
 RIM BlackBerry
    ◦ An always-on two-way pager that let users send and
      receive e-mail.
   WLANs
    ◦ IEEE 802.11b standard, “Wi-Fi.”
    ◦ Short-distance wireless Internet access at a broadband
      speed of 11 Mbps.
                                           Opportunity/Threat ?
   Both focused on data transmission, but with (VoIP), they were
    poised to become serious competitors in the voice arena.
THERATS OF NEW ENTRANTS
 Barriers to entry were rising as consolidation
  made size and scope critical at a time when
  capital was drying up.
 Since building a nationwide network costs in the
  neighborhood of $10 billion, this cost was not
  negligible.
 Competition was driving prices down, and the
  ARPU(Average Revenue Per User) based on voice
  services was falling.
    WIRELESS APPLICATIONS
 Wireless operators were left with but one choice find a “killer
  application” .
 mCommerce Applications
    ◦   payments,
    ◦   location-based marketing and directory services,
    ◦   off-line shopping,
    ◦   Gaming and gambling
   Telematics Applications
    ◦ convergence of telecommunications with the
      automobile
    ◦ Mobile services delivered via wireless technology to in-
      vehicle devices.
   Location-sensitive applications
The Opportunity for Wireless Data

   In spite of all these applications, forecasts for the
    wireless data market remained questionable.

   Forecasts for wireless data services, once
    predicted to quickly reach tens of billions of
    dollars, had dropped. The most recent projections
    showed demand reaching less than $5 billion by
    2004.
     SPRINT PCS APPROACH
   Sprint PCS had recently bid $280 million in an
    FCC auction, compared to Verizon’s $4 billion,
    just for the rights to New York City.

   In late 2001, the company was upgrading its
    network to CDMA2000 1x at an expected cost
    of about $1 billion.
Now, Think hard!
   Which company would hold market power in the
    evolving wireless Internet landscape?
   What are the CSFs in the wireless industry?
   How would Sprint PCS respond to WLAN, satellite,
    not to mention other cellular competitors?
   What would be Sprint PCS’s competitive advantage?
   How quickly would data services reach mainstream
    adoption?
   Could Sprint PCS and its competitors generate
    positive ROIs on their planned 3G network upgrades?

				
DOCUMENT INFO
Shared By:
Categories:
Stats:
views:9
posted:6/10/2011
language:English
pages:19