Head of Sprint Foresees A Legion of Technologies
Extraordinary growth put down to public demand for instant access. WIRELESS COMMUNICATION
THE pagers worn by John Frazee's young children let them know when to come home from playing outdoors. "It's better than screaming your lungs out," Mr. Frazee says.
He also provides his two older boys with car phones for safety. "When they're in the car and I call them," he says, "they'd better answer it or they're in trouble."
Frazee describes himself as "a gadgeteer" who impulsively buys "everything that whirrs and hums." But his interest in telecommunications is also professional. Last month Frazee became the president of Sprint Corporation, the nation's third-largest long-distance telephone company.
His new position resulted from Sprint's $4.7 billion merger with Chicago-based Centel Corporation, which Frazee had headed. Centel, the nation's ninth-largest cellular telephone service, brought 400,000 subscribers to the wedding. Now Sprint is the only telecommunications company in the United States to operate cellular as well as local and long-distance services.
From his vantage point atop the unique telephone company, Frazee foresees a multitude of new technologies that will both compete against and operate interdependently with existing ones. The result will be a vastly larger demand for telecommunications by consumers who will not care which technology they use, as long as they get the service they want. Not just business users
"The great thing about the '90s," Frazee says, is that "we're beginning to use these telecommunications technologies in applications for everyone, not just big business. That's what this whole trend in telephony is all about."
Evidence of the trend is the annual growth rate in demand for cellular service - 43 percent in 1991 alone. The public has taken to the 10-year-old service faster than to television, the videocassette recorder, the facsimile machine, or cable TV, the Cellular Telecommunications Industry Association says.
The cellular industry has 11 million customers. "It surprises even the bulls," Frazee says. Sprint Cellular, as Centel has been renamed, is already a year ahead of the subscriber target set just a few years ago.
Yet the still-fledgling industry made about every mistake that would dampen demand, Frazee says, beginning with naming the technology "cellular." People "can't even pronounce the word very well," he says.
Then there are complicated monthly statements, the fact that cellular customers are charged for calls they receive, and the failure of the industry to advertise all the services cellular can offer, like fax and data transmission. Rapid growth has taxed system capacities and operating company administrations.
"It's really extraordinary that it has grown as fast as it has," Frazee says, attributing the phenomenon to the public's demand for instant access. "We want to talk. We want to talk now."
Sprint is negotiating with other telephone companies to have callers pay for conversations with cellular phone users.
The only parts of the country without cellular service are areas of low population density. Even in those, companies are erecting transmission towers along interstate highways "just to catch the roamers," Frazee says. Every market is a "duopoly" so that customers can choose between competing service-providers.
Sprint serves 100 mainly suburban and rural markets with a total population of 20 million. Frazee says cellular companies will eventually capture 15 percent of their market, meaning that because of the duopoly total penetration by cellular service will reach one-third of the population.
Given the markets it serves, Sprint has not yet faced the crunch in demand that is forcing other companies to spend millions of dollars to upgrade to higher-capacity digital technology. Sprint used Motorola's analog-based technology to triple capacity in Las Vegas, where the boom in construction and other growth-related industries has created an extraordinarily hungry market for cellular service. International expansion
Frazee expects Sprint to buy, sell, and trade cellular operating licenses in order to optimize its system. Meanwhile, the company is looking for international expansion opportunities. Already it operates the cellular system in Ciudad Juarez, Mexico.
Sprint also has ties with 14 other companies to form MobiLink, which, beginning in September, will allow cellular customers to roam throughout much of the US and Canada.
Easy-to-establish cellular service has been the salvation of some eastern European countries where conventional telephone lines are lacking. But that does not mean they need never set the poles and string the wires, Frazee says.
Telephones tied to land-lines, such as Sprint's fiber-optic network, will remain the heart of the telephone system.
"There are literally billions of dollars being spent on the deployment of fiber-optic technology," Frazee says. "While wireless is a tremendous addition to the world's portfolio of technologies for telecommunications, it is just that."
"No one technology is going to dominate," he predicts. "Cellular has a lot of capacity, but it doesn't have the capacity that's going to be required for video in the house or large volumes of data from the business or the house." Besides, technologies that were "first in the field" have "sunk costs" and can effectively compete against expensive start-ups.
"The real wild card ... is regulation," Frazee says. "Right now you have heavy regulation of the telephone companies and less regulation of other technologies. We want fair competition."