In the highly competitive mobile phone business, it's not easy to stand out from the crowd. Sprint Nextel, the No. 3 mobile operator in the U.S., is relying on new data services to spur growth. The company has recently revealed more details around its plan to build a supercharged 4G network using WiMax.
It's also working hard to attract mainstream consumers to its services by lowering the prices on music downloads to 99 cents and including navigation services for free with certain data plans.
The company is doing all of this to attract new customers to its service and entice existing ones to stay. Here at the CTIA Wireless tradeshow, CNET News.com sat down this week with John Burris, Sprint's vice president of wireless data services, to discuss the company's strategy for the future.
Q: Sprint is making a big push with its 4G WiMax network initiative lately. Can you briefly describe for me the strategy?
Burris: We believe we have been a leader in wireless data services and WiMax is a continuation of that history. We also have one of the most advantageous pieces of spectrum that is great for the WiMax service, so it makes sense for us to use that technology.
Our strategy has a couple of prongs. First, there is the continuation of improving the network and making it faster and faster, so that you'll be able to have devices doing really cool stuff like transmitting TV in high definition. Another part of the strategy is putting WiMax chips in devices like a Sony video camera or a personal game device or in all PCs or set-top boxes.
Sprint just lowered its pricing for music. Why? Were you finding it difficult to compete with services like Apple's iTunes?
Burris: It really had little to do with Apple. We had always planned to go big in music in 2007. And we wanted everything in place so there were no hurdles to keep people from trying it. We wanted Sprint to be the place you go to grow your catalog.
Sprint also bundled for free its TeleNav GPS navigation service into data packages costing over $20. Why?
Burris: We think that consumers need to get more for less. When we first launch a service, we target early adopters. They tend to use a service more heavily, and they might see real value in a $9 per month price point. But once you penetrate that market, you have to get creative about reaching the other 40 percent. And with services like navigation and location-based search, for example, most people won't need it everyday. So we created a pay-per-day model for the mass market.
I always think of it this way, "What will it take for my dad or grandfather to use a service?" It's important to find a low-risk way of allowing people to try out new services. It's also important that the bills are not complicated so people understand what they're paying for.
Will advertising help with any of these cost issues? And how does Sprint envision using advertising to supplement revenue?
Burris: Yes, we have a model in place that lets us provide a compelling user experience and also lets us monetize services through advertising. It seems obvious to integrate advertising into mobile TV. But it might be a little less for other things like full music tracks. That said, there is a long history of advertising on the radio. And there is a certain understanding with streaming content that you could listen to an advertisement after five songs or something. We're working carefully to integrate advertising where and how it makes sense.