SPRINT PREPS FOR BUNDLING

The bundling wars have begun, and if any carrier is prepared to enter that fray, it's Sprint. Because the carrier has kept itself nimble and left all its operating divisions intact, Sprint is perhaps in the most secure position of any carrier to take advantage of the economics and organizational merits of the new bundle demands of its customers. And as it demonstrated last week, Sprint is ready to use that advantage.

Last week, Sprint issued an innocuous release, saying it would enter into a major business unit realignment, scrapping its three global operating divisions—local telecommunications, global wireless data and voice services, and wireless—for a streamlined corporate structure divided into two segments: business and consumer. The carrier gave few details and refused any interview requests, but promised to make everything clear at its December investors meeting.

Sprint, however, did say what it planned to gain from the transformation: a way to grow its top-end business and save $1 billion in operational costs annually. Analysts said those expectations aren't far from reality. During the telecom boom, investor pressure and competition forced many carriers to separate their assets, forming partnerships here and spinning off divisions there. Unlike almost every other major carrier, Sprint has kept its core wireline and wireless businesses intact. While other carriers can still compete with bundled services through wireless partnerships, none of them can achieve the same streamlined efficiency and focus of which Sprint is capable, said Berge Ayvazian, an analyst for The Yankee Group.

“Sprint is a unique company in the telecom industry today,” Ayvazian said. “Sprint doesn't have to have two CFOs or two engineering staffs. It can make singular decisions about the whole company. The other carriers are going to have a hard time of it.”

Sprint has been talking about potentially streamlining itself for years, and there has always been talk of reincorporating the PCS tracking stock with the overall company.

In the last year, Sprint has even started to internalize and integrate many of its back office systems, said Susquehanna Financial Group analyst Marianne Wolk, who closely follows Sprint's back office vendor Amdocs. Wolk said Sprint PCS, which already uses Amdocs' CRM solution, is working with the vendor to introduce a more versatile billing solution for data services as well as integrated billing and customer care solutions for Sprint's wireline group. Ultimately, Sprint will be able to react to new bundled offers from competitors in a day's time, giving it a significant edge in the market.

“Sprint has already laid a lot of groundwork to improve its flexibility,” she said.