Sprint chief acknowledges transitions in ION, Global One

By David Rohde
Network World Fusion, 05/12/99

LAS VEGAS -- Sprint Chairman William Esrey is no longer calling his crown-jewel next-generation network, Sprint ION, the unique savior of networking, or claiming that his myriad domestic and international partnerships are problem-free.

But basking in the glow of a soaring stock price and continued independence in a merger-mad world, Esrey stepped into the spotlight at Networld+Interop in Las Vegas and continued to push Integrated On-Demand Network (ION) as Sprint's principal strategic move for the next century.

Tuesday Esrey demonstrated some combined voice and data applications for ION at small business and residential locations. After the demonstration he held a press conference in which he acknowledged that the service - which aggregates voice, video and data through a single access device and local access line - is still evolving.

Details of the ION small-office offering are still awaiting a beta test. The first pricing and service models that Sprint announces won't be the last. "This is going to evolve. It will change after we introduce it," he said. Sprint has never formally announced ION pricing for large businesses either, though a recent tariff filing at the Federal Communications Commission reveals a dual usage-based and flat-rate structure.

Esrey did reveal in his keynote that Sprint plans to sell a software package, called ION Desktop Manager, that will enable users to manage multiple phone calls plus data and video sessions from a single client desktop.

The tone of Esrey's remarks was quite different from a year ago, when Esrey announced ION at a Broadway theater and said that only Sprint had the capability to provide such a converged service.

For example, Esrey said AT&T's strategy of reaching residential location via cable lines is a "viable strategy." But he added: "I do question the amount of money they're spending to put all this together."

AT&T is shelling out more than $100 billion in stock and cash to purchase cable giants Tele-Communications and MediaOne. Also, AT&T faces billions more in capital expenditures to upgrade those lines to two-way telephone and interactive data applications. By contrast, Sprint is spending the relatively modest sum of about $1 billion in purchases of companies with fixed wireless licenses that potentially cover about a quarter of the country for local access.

Esrey acknowledged that he has had to pay a lot of attention to Sprint's myriad partnerships for global, wireless and integrated-access services, many of which have been marked by internal disagreements.

"There's no question that partnerships are difficult, more difficult than if you own [a network] yourself," Esrey said. "But partnerships can work and be very successful." Both AT&T CEO C. Michael Armstrong and MCI WorldCom CEO Bernard Ebbers have emphasized buying networks rather than creating partnerships, drawing an implicit contrast with Sprint, which owns many fewer global assets and big-city domestic local networks.

Esrey also acknowledged that Sprint's partnership with France Telecom and Deutsche Telekom has had its share of problems. "We have not been aligned as effectively as we should have been," he said. Without pointing fingers at any one party, Esrey said at times the partners have been selling their own services in competition with the joint venture, known as Global One.

But he claimed that was a separate issue from the performance of Global One itself, which is among the world's leaders in the number of countries covered for frame relay and ATM. After a rocky start in 1996, Global One's performance "has improved dramatically," he said. Analysts are widely expecting the ownership structure of Global One to change now that Deutsche Telekom is proposing to merge with a nonpartner, Telecom Italia.