A N I N T E R V I E W W I T H S P R I N T

B Y G E O F F W A L K E R

16 PEN COMPUTING MAGAZINE www.pencomputing.com

During Comdex 2003 Pen ComputingMagazine had a chance to speak with

Kevin Packingham, Director of Busi-ness Marketing, Sprint PCS Di-

vision about Sprint’s view ofwireless wide-area data

and its impact on themobile lifestyle.

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alize what the value is, then I don’t think thewireless charges are going to be the barrier.

HANDSETS

PCM: Sprint offers smartphones such as theHandspring Trio 600 and PDA phones such asthe Hitachi SH-G1000. Does the culture of thecompany favor one form-factor over the other?

Sprint: There’s very little bias in the culture ofthe company. We are first biased towards vol-ume, like any company – we care about whichtype of handset and operating system is goingto generate the most volume. Once you movebeyond that, we really don’t have any other bi-ases. We just try to create devices that meet theneeds of our customers. Hitachi is a great ex-ample. Our customers were asking us for an in-tegrated wireless Pocket PC device that had akeyboard. We worked with Hitachi to offer theSH-G1000. It’s not a high-volume device for us,but it does meet a certain demand. On the oth-er hand, we think the [Handspring] Trio 600 isgoing to be one of our highest volume devices.

MARKET

PCM: What are the top three things that makeSprint more significant than the other wirelesswide-area data networks?

Sprint: First is a single technology (CDMA) na-tionwide – it gives us enormous advantage. Ver-izon has both CDMA and analog, and they’restill fighting that battle. We have a single tech-nology nationwide, one billing system, andeverything is integrated.

Second is the technology itself. Comparedto GSM, CDMA gives us higher throughput(peak data speeds of 144 Kbps). Our data net-work doesn’t cannibalize the capacity of ourvoice network; they’ve very symbiotic. Ourtechnology is backward compatible, so we nev-er have to force customers to replace their old-er devices (as is happening with AT&T Wire-less and CDPD).

Third is the coverage. We have nationwideservice and the ability to roam virtually any-where in the country. It’s true that there arecertain areas where our footprint is not as ad-vanced as other carriers (such as the WestCoast), but when you aggregate all the cover-age, we have the most.

PCM: What is Sprint’s market share comparedto the other wireless data networks?

Sprint: It’s all speculation, since none of thenetworks publish anything. Personally I wouldspeculate that we have the dominant share. Weknow that we have more than three million PCSVision users, and about five million total wire-less wide-area data subscribers. We enteredthis game in 1999, and we’ve been building themarket since then. If you look at the numberof sales we’ve had of wireless data PC cards ver-sus the total market for the cards, we’re thebiggest player.

PCM: What’s the breakdown today betweenconsumer and enterprise for wireless data?

Sprint: In terms of the overall number of sub-scribers, consumer is much more heavilyweighted. On the volume side it’s not as dis-similar as you might think – it’s pretty equal.Enterprise users are using PC cards and trans-mitting large quantities of data; consumer pic-tures are very small so they don’t generate asmuch volume per user. Overall, consumer vol-ume is slightly higher. On the revenue side,consumer has a slight edge. Because many en-terprise users are on unlimited plans, they usemore volume but they don’t necessarily paymore for it.

PCM: What markets for Sprint’s wireless wide-area data service have the most growth po-tential?

Sprint: We’re starting to see a lot more tractionin public safety, especially fire; digital imagingis starting to really take off there. With prod-ucts like the Trio 600, we expect to see a lot

more in distributionand transportationcoming very soon. Ithink they’ve beenwaiting for a longtime and looking forthe right portfolio ofservices. Especiallywith telemetry –now you can do lo-cation services, re-mote monitoring ofvehicles and pack-age tracking. I thinka lot of those capa-bilities will revolu-tionize the way theydo distribution.

PCM: What other vertical applications are hot?

Sprint: Real estate is getting huge. Some of thenewer lock boxes such as the one from GE In-terlogix require wireless (infrared) devices toaccess services such as electronic notes thatcan be left by the listing agent for the showingagent. Wireless data is definitely changing be-havior in the vertical markets. The movementstarts purely based on ROI, because after all,business is business. Then once the users havewireless data, it changes their behavior.

MESSAGING

PCM: Will wireless messaging ever be really bigin the USA, like i-mode in Japan or SMS in Eu-rope?

Sprint: The adoption in Japan and Europe hasbeen for different reasons – cultural reasonsand price reasons (for example, their landlineservices are much more expensive). I don’tthink you’re ever going to see that type of adop-tion in the USA.

PCM: Do you think that the text messagingthat’s popular with kids now will follow theminto adulthood?

Sprint: That could be, we’re all speculating. Ifyou look at the current adoption of services byadults, and look at the trend of instant mes-saging, for example, you’ll see that at somepoint people reach a tolerance for how theycommunicate. You and I are never going to sitand triple-tap out a message on a phone. At the

AirPrime ................................................................www.airprime.com GE Interlogix ..........................................................www.geindustrial.com/ge-interlogix/ Growell Telecom ..................................................telecom.growell.co.kr Handspring............................................................www.palmone.com Hitachi ..................................................................www.hitachi.com International Telecommunication Union ................www.itu.int Novatel ..................................................................www.novatelwireless.com Sierra Wireless ......................................................www.sierrawireless.com Sprint ....................................................................www.sprint.com

COMPANIES MENTIONED IN THIS INTERVIEW

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point where you start making money [as anadult] and you start valuing your time differ-ently, those kind of services take on less mean-ing. It’s much easier for you to call someone fora quick conversation than to try to type on aphone. You realize that you just wasted $20 ofyour time trying to tap out a message.

PCM: But that’s a device-specific limitation,not something that’s inherent in messaging,the network or the culture.

Sprint: That’s true to the extent that people arewilling to start changing their selection of de-vices. People want the coolest, sleekest thingthey can find. The smaller and sleeker it gets,the less usable it gets.

PCCARDS

PCM: What’s the installed base of users withwide-area wireless PC cards?

Sprint : I can’t give you exact numbers, but wehave four cards available, and we have thou-sands of customers buying connection cardsevery week. From [the viewpoint of] the top ex-ecutives of the company, it’s a meaningful partof our business.

PCM: Wireless LAN PC cards are going away,since every almost every new notebook has WiFibuilt in. Will the same thing happen with wire-less wide-area PC cards?

Sprint: I don’t think so, because people are go-ing to continue to want to have some optionswhen it comes to their service provider. Withwireless LAN, you can select any kind you want.The same isn’t true with wide-area wireless be-cause the technologies and the radio frequen-cies differ between wide-area service providers.You want the ability to change providers, butwith an embedded chipset you can’t do that.

PCM: Who are Sprint’s wireless data PC cardsuppliers?

Sprint: Novatel and Sierra Wireless are our mainsuppliers. Since Sierra Wireless acquired Air-Prime, the balance between the two suppliersis probably close to 50-50. Novatel isn’t as biga company as Sierra Wireless, but they cameout with a great price point and they’re very ag-gressive in their marketing.

PCM: When will wireless data PC cards migrateto the Compact Flash form-factor?

Sprint: We already have one, from Growell Tele-com. It’s a Compact Flash card that can also beused in a PC card adapter. It has an attachablebattery so it doesn’t drain the battery in yourPocket PC device.

WIFIHOTSPOTS

PCM: How does Sprint’s product for WiFihotspot access compare with those from com-panies such as Wayport and Boingo?

Sprint: They look at it from the perspective ofhow to acquire customers. We look at it from a

network perspective, of making sure that wehave enough coverage for our customers whowant this type of service. We have customerswho need these services; they need to start gen-erating some traffic on their WiFi networks toget enough volume to pay for the build-outs.It’s really no different from what we had on thewide-area network, where the adoption of theservices never really took off until you startingseeing roaming agreements. If you were just alittle regional carrier, it was tough to make a sale.But now you’re starting to see some roamingon WiFi networks, where we’re all agreeing tobe compatible with each other. By partneringwith the different service providers, we all win.

PCM : We’ve seen surveys reporting that lessthan 5% of users are willing to pay for hotspotaccess. That’s a big problem for a company likeWayport. Is it less of a problem for Sprint?

Sprint: Yes. The big difference for a companylike Wayport is that they don’t have an estab-lished billing relationship with most customers.Personally, I am not going to go into a hotspotand type in my credit number and give it tosomebody I don’t know. The fact that I have abilling relationship with Sprint and can add afew dollars to my bill makes it much less threat-ening. I think that’s the big challenge [for com-panies like Wayport].

PCM : Will hotspots become a hugely success-ful phenomenon? Sprint: I wouldn’t say “hugely successful”. Forus, it’s good business. We can put hotspots inareas where we have predictable traffic pat-terns like airports, hotels and convention cen-ters, and it’s a great supplement for us to ourexisting coverage.

PCM : Today’s problem is that the supplier isdifferent in each hotspot. Do you think that thecarriers are eventually going to buy up all thesuppliers and solve this problem?

Sprint: I don’t think we necessarily have to ownthem, but we have to be able to aggregate thebilling relationship between the suppliers.We’re not necessarily interested in buying anew network, but we want to have an aggre-gation point where we have one bill that goesto the customer. If you move from one airportto another, you shouldn’t get dinged twice inthe same day for the same service.

PCM : What will it take to make hotspot usageas common as cellphone usage?

Sprint: The first thing that has to happen issimplicity. It’s just too complicated to figureout how to get access. The software that Sprintreleased a few weeks ago [PCS ConnectionManager] has a big “Go” button. You sit downin a hotspot, and you hit Go. We’ve tried totake some of the complexity out of picking theservice and trying to decide if you should con-nect with a wide-area network or a local areanetwork.

PCM : Today Sprint has “seamless toggle” be-tween WiFi and wide-area wireless; when willSprint have “seamless roaming” that allows asoft handoff between the two networks?

Sprint: So far we haven’t seen any demand forthat. Most corporate security departmentswant a hard handoff between networks. Theywant the user to re-authenticate.

VOICEOVER IP

PCM : Does Sprint see a way to make moneyfrom VoIP?

Sprint: Certainly, with a product like PCSReady Link, Sprint’s new VoIP-based, push-to-talk service. For other customers who de-velop their own applications with VoIP, it’s an-other data application. We want our customersto create data applications, because the moredata applications they build, the more they’regoing to subscribe to data services.

CONVERGENCE

PCM : There are multiple wide-area wirelesstechnologies in the USA today – will there everbe just one technology?

Sprint: I don’t think there will be, and I don’tthink we [the industry] want there to be. Wewant there to be compatibility between thetechnologies. The different technologies havedifferent strengths, and we want to leveragethose strengths where appropriate. I also thinkit’s good for the industry to have competitionbetween the technologies so that we contin-ue to drive innovation. If a single technologyhas a monopoly across the world, you’re go-ing to lose that innovative edge.

Sprint: Ten or twenty years down the road, doyou think that the USA will be better off withmultiple technologies than Europe will be witha single GSM standard?

Sprint: Europe will be better off because theUSA hasn’t embraced a single technology.Countries like the USA will continue to driveinnovation for GSM because in the USA, theGSM carriers are competing with the CDMAcarriers. Europe will just get the benefit.

PCM : If you look far enough ahead on thetechnology roadmap, don’t the technologiesconverge anyway?

Sprint: Right. You’ve got wideband CDMA[GSM’s next evolution] and CDMA2000.They’re close enough so we think we’re goingto be compatible, but you’re still going to getthat innovation in the industry.

PCM : Thank you!

Based in Silicon Valley, Geoff Walker is a consultantwith Walker Mobile®, LLC. Geoff has worked on theengineering, marketing and application of mobile com-puters since 1982 at GRiD Systems, Fujitsu PersonalSystems (now Fujitsu Computer Systems) and Hand-spring. He can be contacted at geoff.walker@att.net.

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