WASHINGTON-Sprint Spectrum L.P., which began offering personal communications service in Washington a year ago through partner American Personal Communications, has converted its marketing from a big-bang effort to one resembling a continuous rumble.
During the last 13 months, the carrier has attracted more than 100,000 subscribers (July 1996 figures); has nearly doubled its cell sites (from 264 to 414); and has won a first-place J.D. Power and Associates award for customer service, call quality and price seven months into its existence.
Mirroring its initial plunge into the marketplace during last year’s holiday season, Sprint Spectrum this year has been running major print ads in cooperation with its retail partners and has offered a $99 phone. Retail outlets handling the Sprint Spectrum phones and service have doubled since last year-to 400-cutting an even larger customer-recognition swathe this season. With increased training and advertising provided by Sprint Spectrum, and word-of-mouth testimonials provided by friends and relatives who are subscribers, retail workers are having an even easier time this year promoting the shrink-wrapped phones in a box.
According to Anne Schelle, APC’s vice president-external affairs, Sprint Spectrum’s customer demographic hasn’t changed much since PCS first was introduced; most Sprint Spectrum buyers are those who have considered going wireless in the past but never made the move, mostly because of cellular pricing and contract arrangements. The carrier also boasts a healthy business-customer base.
“We only projected 60,000 subscribers by the end of this year,” she said. “And we are really surprised by how much people are using the phone.” Schelle said her subscribers’ traffic patterns are markedly different from those of cellular callers. Instead of spiking during two peak business times of the day, as Schelle said cellular traffic does, PCS customers tend to use their phones at a consistent pace throughout the day, with no measurable peaks.
“PCS use really mirrors landline use, which proved our theory that this is a consumer product, something to use all day long and not to just put in your glove compartment,” she said.
And customers apparently are satisfied, because the company hasn’t experienced any more churn than has its cellular counterparts; most subscribers who have discontinued their service dropped out after their one-month trial. Complaints about coverage holes have been contained, for the most part, by cell-site expansion, and subscribers currently can make unobstructed calls all over the Washington, D.C./Baltimore metro areas, most of the suburbs and along all major interstates and highways, including those that lead to the area’s most popular beach and mountain locations.
While keeping current subscriber numbers and marketing strategies close to the vest, Schelle said Sprint Spectrum’s success has impacted Cellular One and Bell Atlantic Nynex Mobile in the Capitol area, and that the incumbents have had to deal with continuing to charge extra for what Sprint includes as built-in enhanced features. As announced two weeks ago, Sprint Spectrum marketers have another perk to offer potential subscribers-a $30 rebate on PCS service immediately if they sign with Sprint for long distance and another $30 rebate if they remain subscribers for six months.
“We’ve been the market leader for first-minute-free inbound calling and for caller ID,” Schelle said. “They are following our lead. The cellular legacy is high prices and poor quality, and it’s hard for them to overcome these charges. Our features have driven up minutes of use, even if people have bought our lowest-priced `safety’ package.” She added that Sprint Spectrum’s marketing technique all along has been to sell usage rather than just safety, and people have been talking more on Sprint’s GSM system; cellular carriers, she said, are not selling a consumer item, but continue to sell a business or safety tool.
Subscribers are talking. A lot. Schelle said Sprint Spectrum has been enjoying a 50/50 termination rate (50 percent wireless-to-wireless calls and 50 percent wireless-to-wireline calls) on the network, adding that cellular carriers usually report a 80/20 termination rate, in favor of wireline calls. Schelle attributes much of the Sprint Spectrum advantage to the first-inbound-minute-free feature; the company is not considering switching to calling-party-pays at this time, but will “go where the industry goes” in the future on this issue.
The Sprint Spectrum GSM network can handle six times the analog traffic currently running through its competitors’ systems, and Schelle, when thinking about the future and more PCS digital competition in the marketplace, wonders what carriers will do with “all that excess capacity that will be available?” Schelle herself has not given that scenario much thought because “we’ve been too busy working in start-up mode.” The carrier also has been building out, collocated with its GSM sites, a Code Division Multiple Access network that will make the Washington, D.C./Baltimore area compatible with other Sprint Spectrum venues nationwide that will be cut over within the next few months (see related story on Page 3). The CDMA system should be operational by the end of 1997.
In the “doing well by doing good” department, Sprint Spectrum has donated 60 phones plus service to two Washington, D.C., schools for teacher usage, and it plans to expand the program into Maryland and Virginia. “Washington schools have an average of two phones in their buildings, usually located in the office,” Schelle explained. “Teachers can’t leave the class to use them. Now they have phones to call parents immediately, if need be, and to do research on class projects.” Sprint Spectrum also will offer schools wireless Internet access as soon as it gets its data service up and running. In addition, the carrier also is investigating locating cell sites on school roofs, giving phones and service in lieu of rent.
Schelle admits that, despite all its successes this past year, Sprint Spectrum did have some challenges to overcome, especially with customer service and billing. “When we launched, we were only staffed up to accept 30,000 customer-service calls per day, and we got twice that,” she said. “There was a wait time for activation, which we solved, and we staffed up immediately. We also were two months late with our initial billing, because we `Americanized’ the system with which we were dealing, and there were bugs in the software.” Because subscribers liked the PCS service and phone so much, she said, they were willing to put up with these initial glitches.
And now Sprint Spectrum is preparing for its next challenge: AT&T Wireless Services Inc.’s summer entrance into the Washington, D.C.-Baltimore PCS arena. Schelle could not comment on what strategies have been formulated to counteract any subscriber flight, but she does admit that AT&T will be a formidable competitor, even though Sprint Spectrum will have an 18-month head start by that time. Despite the difficulties a fourth wireless provider probably will encounter in any given market, “AT&T has very powerful name recognition, and many people who use them for long distance will consider them for PCS service,” she said.
