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Carroll School of Management

Gary D. Forsee

chairman & ceo, spring corporation

CEO of Sprint
Gary D. Forsee, Chairman & CEO of Sprint, addressses the Boston College Chief Executives' Club of Boston at the Wharf Room at the Boston Harbor Hotel.

Sprint CEO predicts wireless-Net link

Sprint Corp. chief executive Gary D. Forsee predicted that next year will see the first "combo phones" come to market in the United States, linking conventional wireless service and low-priced Internet calling.

And given the likelihood cable television companies such as Comcast Corp. and Time Warner Inc. will be among the first to roll them out, the phones will probably include movie trailers and television clips delivered to the wireless handset, Forsee said at the Boston College Chief Executives Club. "That really is the promise of convergence," he said.

Top industry leaders including Forsee and AT&T Corp. chief executive David Dorman have predicted that hybrid phones combining Internet phone service at subscribers' homes or workplaces with cellular coverage outside could be explosively popular with consumers and business people.

CEO of Sprint
Peter Lynch (Vice-Chairman & Trustee, Fidelity Management and Research), Cathy Minehan (President, Federal Reserve Bank of Boston), and Gary Forsee chat before lunch.

Companies including Motorola Inc. and Cisco Systems Inc. have developed prototypes, which are essentially standard cell phones that become cordless phones for super-cheap Internet-based phone service once they are in the range of a "WiFi" wireless fidelity transmitter. Two key issues still being worked out are how to ensure callers can move without interruption between the two modes, and, more important, whether cellular carriers will reject the technology as a threat to their profits because it lets customers switch from wireless minutes to cheap, unlimited Internet calling.

Time Warner this week confirmed it is using Sprint to provide a trial wireless service bundled with cable TV, high-speed Internet, and home phone service in the metropolitan Kansas City market. As phone and wireless companies including Verizon Communications Inc. build new TV-capable networks that enable them to offer a so-called quadruple play- phone, wireless, TV, and broadband- cable companies are looking to Sprint and other carriers to add wireless to their service arsenal. This week, Sprint confirmed it is serving more than 250,000 cable phone customers already.

Because the two biggest wireless companies, Cingular and Verizon, are both owned by Baby Bell phone companies that are archrivals of cable, cable companies are expected to look chiefly to Sprint for wireless and landline telecom services. Comcast and Cox Communications Inc. were also key financial backers of Sprint in the 1990s. Sprint hopes late this year to close a $36 billion merger with Nextel Communications Inc. that will solidify its place as a close number three to Cingular and Verizon, with more than 40 million customers.

CEO of Sprint
Edmund Kelly (Chairman, Liberty Mutual), Thomas May (Chairman, NSTAR), Paul La Camera (President, WCVB-TV Channel 5), Patrick Purcell (President, Herald Media), Fr. William Leahy, S.J. (President, Boston College), Peter Lynch (Vice-Chairman & Trustee, Fidelity Management and Research), Dr. James Mongan (President, Partners HealthCare System), Patrick McGovern (Chairman, International Data Group), Cathy Minehan (President, Federal Reserve Bank of Boston), and William Swanson (Chairman, Raytheon) listen while Gary Forsee addresses his audience.

But Forsee said Sprint continues to negotiate terms with cable companies. "Each company is different, and each company will pursue how they offer service differently," Forsee said.

Among other issues, cable companies have different views on whether to use the Sprint brand, market wireless under their own brand, or take a hybrid approach of "brought to you by or powered by" Sprint.

Comcast spokeswoman Jennifer L. Khoury said last night the company "is in discussions with wireless carriers" but has no service launch plans to disclose. Comcast has periodically offered subscribers promotional discounts to WiFi "hotspot" access from T-Mobile USA Inc. at coffee shops, bookstores, airports, and other locations.

In other comments, Forsee said Sprint Nextel will begin transferring Nextel customers to the existing Sprint network in 2007-2008, but has no plans to shut down Nextel's hybrid cellular/walkie-talkie "integrated digital enhanced network" service any time soon. "I think there is a pretty high likelihood that the IDEN network will live into the future," said Forsee, but in "a rebranded sense" focusing only on push-to-talk services for markets such as public safety, homeland security, and delivery and trades workers, with Sprint handling telephone calls.

Article by Peter J. Howe
The Boston Globe
Wednesday, April 6, 2005