LEN LAUER, SPRINT PCS

For a man who is new to his station — new, in fact, to running a wireless organization — Sprint PCS President Len Lauer certainly has a clear picture of where the No. 4 wireless carrier is headed.

Perhaps it's because of his experience running businesses on the wireline side — Lauer was previously president and CEO of the former Bell Atlantic-New Jersey, and president of Sprint's Consumer Services Group as well as Sprint Business — that the distinction between Sprint PCS and its corporate parent will be blurring soon. Over the next year, Sprint will bundle services across its own companies as it joins the increasingly crowded movement to emphasize quality over quantity.

“We'll have higher wireless data speeds and a much more integrated offering across landline and wireless,” Lauer said.

But if the latest product moves of Sprint PCS are any indication, expect to see a carrier that will look like about a half dozen different companies, depending on the customer's perspective. It's no accident that after it became the first major player to report a net loss of customers in the third quarter of 2002, Sprint PCS is taking a careful look at the various segments that comprise its subscriber base and emphasizing quality over quantity as overall wireless growth significantly slows.

To Joe Consumer, the company may very well be seen as the one leading the charge into image-based messaging. In its initial foray into 3G-type services, Sprint is finding that the ability to send photos and videos as part of a message is becoming a surprise hit with its customers sending and receiving an average of 12 to 15 images per month. Moreover, about 60% to 65% of new users that buy PCS Vision-capable phones are signing up for the Vision service, the marketing of which heavily emphasizes photo messaging. Lauer also predicted that the recently introduced Sanyo 8100 phone, which features an integrated camera, will be among the company's best selling handsets.

“Seventy to seventy-five percent of sharing of pictures is done with family and friends,” Lauer said. “It's about the immediacy of the application.”

Those in the youngest demographic likely won't see much of the Sprint name, but through its wholesale agreement with Virgin Mobile, the company will still benefit. In the first quarter of this year, Sprint added a net 199,000 subscribers, thanks in large part to its relationship with Virgin. And while Virgin initially launched with little mention of Sprint PCS, Sprint is now test marketing the Virgin service in its own retail locations.

“They have a strong play in the niche market,” said Lauer. “You need a very hip, edgy brand to go after that demographic.”

To the business customer, though, the company will look a lot more like a component of a much larger Sprint offering, with a key emphasis on data and differentiation through its various handset options — notably the Handspring Treo. As part of a reorganization after the departure of Sprint CEO William Esrey and Chief Operating Officer Ron LeMay, the PCS group will be more integrated into the larger organization, Lauer said. In fact, new CEO Gary Forsee said at the company's annual meeting in May that it likely would eliminate the PCS tracking stock.

“We changed the strategy of focusing on prime customers, and we told Wall Street we would be more predictable,” Lauer said. “You will see much more smooth growth than we've had in the past.