Sprint Unveils Mobile Internet

By Yukari Iwatani and Sinead Carew

DALLAS/NEW YORK: Sprint PCS Group on Thursday said it will offer customers nationwide the ability to easily check e-mail and surf the Web from their mobile telephones, and analysts said it is a watershed event for the slow-changing U.S. wireless industry. The introduction of coast-to-coast service by Sprint PCS, the No. 4-ranked U.S. mobile service provider, together with a range of new phones and competitively priced services is seen as the big-bang event to jump start competition. Rivals, all of whom already offer limited versions of the mobile Internet, are set to respond with low prices and other services.

In contrast to previous data communications services, which were slow and had limited features, the new networks promise Web connections at speeds similar to or faster than dialing up over standard telephone lines, as most Internet users now do. Sprint's service will allow customers to swap photos and download fast-paced games and eventually to watch videos.

Describing the launch as the biggest thing since it first introduced digital mobile phone service in the mid-1990s, Sprint President Charles Levine said he hopes the service will make up for the company's dismal subscriber numbers last quarter. "(Last quarter) humbled us. I don't really like being humbled," Levine told Reuters in an interview Thursday. "This will allow us to regain our competitive advantage and regain the lead that we've had" in attracting new subscribers.

Sprint PCS' launch of its new service, called PCS Vision, is considered by analysts to mark a major dividing point for the U.S. wireless industry, which lags behind Europe, Japan and South Korea. Competitors are racing to complete their networks by year-end with sleek new devices and innovative services.

In South Korea, the first country to launch the more advanced mobile services, 13 million of the nation's 30 million mobile users have converted to the faster phones since 2001. Some 1.6 million users have signed up so far in Japan. Europeans have so far been slow to adopt similar new services. Wireless operators are hoping demand for high-speed wireless data will be the next catalyst for growth in an industry in which voice-calling alone has run out of steam.

Analysts said Sprint PCS appeared to be making a good start with its wireless data offering, but added it was too early to predict its success, given the mixed record overseas. "If it's really successful, it really does set the stage for Sprint PCS to gain meaningful market share," said Thomas Lee, an analyst with brokerage J.P. Morgan.

While the news was long-expected, Sprint PCS shares rose 7 percent, or 27 cents, to close at $4.11 on the New York Stock Exchange. Shares of wireless equipment supplier Motorola Inc. rose 7 percent, while Nokia of Finland leaped 11 percent in U.S. trading to close at $12.48. Qualcomm , a key Sprint technology supplier, gained 4 percent to $26.04.

Sprint PCS, a unit of U.S. local and long distance phone service provider Sprint Corp., said consumers on its new network can expect average data speeds of 50 kilobits to 70 kilobits a second -- equivalent to Internet dial-up over phone lines. Peak speed can run to 144 kilobits a second, it said. PCS Vision will initially give customers the ability to take and send pictures, download games and ring-tones, send short text messages and surf popular Web sites like ESPN.com, Google and Amazon.com.

Customers who purchase a wireless access computer card will be able to surf the Web and check e-mail on their laptops or handheld PCs. Corporate customers can access applications like Microsoft Outlook scheduling software and Lotus Notes e-mail through cell phones, laptops and personal digital assistants. Sprint PCS is introducing service plans that cost between $49.99 to $119.99 and include voice minutes and megabytes for data use. Laptop computer users can sign up for monthly plans ranging from $49.99 to $119.99 for 20 megabytes to 120 megabytes of data.

"I suspect this is their first shot at what their price plans are going to be," said William Benton, wireless analyst with William Blair & Co., adding that Sprint may cut its prices, depending on rivals' responses and customer demand.

Sprint PCS is introducing the service with four mobile phone models with color screens, two wireless access PC add-on cards and a camera attachment. Prices range from $180 to $500 and offer the widest selection yet of phones and other devices compared with rivals. New phones are supplied by South Korea's Samsung and LG Electronics , Japan's Sanyo and Handspring , a U.S. maker of Palm-based handheld computers.

"The different number of phones will be the key to their success," said Herschel Shosteck, chairman of Washington-area based wireless consulting firm Shosteck Group. Sprint's service relies on technology from Qualcomm Inc. known as Code Division Multiple Access (CDMA) wireless technology, the dominant standard in the United States. The advanced version is known as CDMA2000 1X.

The nation's largest operator Verizon Wireless, which is currently rolling out its advanced network, was the first national operator to launch CDMA2000 1X. Cingular Wireless and AT&T Wireless Services Inc., the No. 2 and No. 3 wireless operators, are upgrading their phone networks to a slightly slower next- generation system based on the world's dominant wireless technology, Global System for Mobile Communications (GSM).

(With additional reporting by Eric Auchard in New York)

© Reuters