Sprint Telecommunications Venture has awarded contracts to build its personal communications services network to AT&T Network Systems Inc. and Northern Telecom Inc. with roughly a 60/40 split of STV’s markets. The contracts are valued at more than $3 billion.
“Today’s announcement is a key step in bringing next-generation wireless services quickly to customers coast to coast,” said Ronald LeMay, STV’s chief executive officer.
STV said it plans to introduce PCS service in 20 to 25 major metropolitan areas-covering more than 100 million people-by the end of this year. The venture hopes to complete the rest of the network by December 1998. The system will use digital Code Division Multiple Access technology.
“The breadth of our network is huge. It requires more than one vendor,” said STV spokesman Mark Bonavia.
Using multiple vendors will enable STV to minimize the risk of buildout delay, said Richard Siber, a telecommunications analyst with Andersen Consulting. Siber noted that some people were taken by surprise that AT&T-Sprint Corp.’s long-distance rival-was in the running for the PCS equipment contract and that it could only win if Sprint believed AT&T was playing by the rules and not cross-subsidizing its long-distance business with profits from its network systems business. AT&T wants to spin off the two divisions into separate companies as part of a restructuring.
“We’re satisfied there’s no conflict of interest for AT&T,” said STV’s Bonavia.
The PCS equipment contract is a feather in the cap for Nortel, Siber noted. “They missed the boat on cellular and started a few years later. But they are getting in early on the curve in PCS,” he said.
STV also announced that its constituent partners-Sprint Corp., Tele-Communications Inc., Comcast Corp. and Cox Communications Inc.-have agreed to provide $4.2 billion through the end of 1997 toward the aggressive PCS buildout plan.
