Competition and Analysis
The Strategy Analysis of Sprint:
Looking Into Its Future
A Look at Sprint
Sprint is an integrated global communications company that is focused in the US market. In 2003 Sprint earned 26 Billion in revenues with 26 million customers in 100 countries. Sprint is recognized as developing, engineering, and deploying cutting edge network technologies such as the US's first all digital, fiber optic network. Sprint currently has three main divisions: the long distance division which offers phone and data services throughout the world, the PCS division that provides wireless phone and data services to customers in the US and Puerto Rico, and the Local Distance Division (LDD) that offers local telephone service to clients in 39 states. Sprint is generally ranked third in the communications industry behind AT&T (who holds significant market share) and MCI. Sprint is the fourth largest wireless phone service provider.
Sprint currently operates in two different industries: the traditional telecommunications industry and the newer wireless phone industry. The telecommunications industry provides traditional voice services (local and long distance), data networking services (technologies that provide private networks - Private Line, Frame Relay, and VPN), and Internet. The wireless industry is comprised of companies that offer wireless phone services with other value added features such as Internet, Voice Mail, Walkie Talkie, music, etc
It is important to make the distinction between the two industries now because the conditions of each are different. The first tool I will use when looking at the telecommunications and wireless industries is Porter's five forces model with the addition of analyzing complements. Suppliers
The suppliers of networking and phone equipment now have little bargaining power. The main reason for this is that the technologies are based on open standards, commonly known in the industry as protocols. This means that most types of equipment can easily be replaced and/or connected to different types of equipment. In regards to data networking equipment, Cisco has long been the market leader. Their position is being challenged by Juniper Networks. Margins on network equipment of any type have been razor thin since 2000. The net effect is that the suppliers of networking and phone equipment have low bargaining power. Other suppliers of telecommunications are companies that have a monopoly of a certain market. This means that a certain company is the generally the only company to have a complete infrastructure built in an area. Mostly these companies are the traditional bell companies (aka RBC's Regional Bell Companies) that supply the last mile' of service from a common meeting point in the city to the customer's doorstep. Qwest (US West), Bell South, and SBC (Pacific Bell) are examples of Regional Bell Companies. These companies are the only significant players in those markets and are regulated by the government to control prices. They have bargaining power in those markets and will continue to have that power until other companies build infrastructure in those areas or deploy new technologies to by pass the traditional last mile'. Suppliers of mobile phone services have a little more bargaining power than the suppliers of communications components, listed above. Some suppliers differentiate themselves with different types of features such as "Push to Talk" with Motorola and integrated Palm devices deployed by Palm and Qualcomm. Most of the standards are still open thus limiting the bargaining power of the suppliers to the mobile phone service providers. Potential Entrants
There is little threat of new entrants into the telecommunications industry. The cost to build a network requires are large amount of capital investment. These networks are very complex because not only do they have to cover long distances in the U.S., but...
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