Sprint's plans for 2005

Sprint this week laid out its strategic direction for 2005, which includes executing on its wireless data network deployment, expanding its business services and seeing its Nextel merger through.

The carrier expects these efforts to result in higher revenues for 2005 with “growth rates in the low single digits.” Based on Sprint’s guidance, the carrier will likely report no more than $28.8 billion in revenue in 2005, or 5% growth this year.

Sprint recorded $27.4 billion in revenue for 2004, which was 5% better than 2003's $26.2 billion.

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Sprint this week laid out its strategic direction for 2005, which includes executing on its wireless data network deployment, expanding its business services and seeing its Nextel merger through.

The carrier expects these efforts to result in higher revenues for 2005 with “growth rates in the low single digits.” Based on Sprint’s guidance, the carrier will likely report no more than $28.8 billion in revenue in 2005, or 5% growth this year.

Sprint recorded $27.4 billion in revenue for 2004, which was 5% better than 2003's $26.2 billion.

The carrier also plans to keep its capital expenditures (capex) at about $4 billion to $4.2 billion in 2004. Last year the carrier's capex totaled $4 billion.

A good portion of Sprint’s capex is being put toward its wireless data network build-out. Sprint says it will spend $2.7 billion to $2.9 billion on its wireless network, about $900 million on local networks and services, and $300 million on its long distance network.

Spending on wireless will include $750 million on Sprint’s Evolution Data Optimized (EV-DO) “aggressive” network deployment. In 2004, EV-DO was available in three Sprint markets; by year-end Sprint expects to support EV-DO on more than 60% of its network, reaching about 80% of the carrier’s customers. 

EV-DO is a wireless data technology that supports transmission speeds of about 300K bit/sec to 500K bit/sec. The technology maxes out at about 2.4M bit/sec.

The carrier is focusing on three prime product development strategies: wireless adoption for business users; erasing the barrier between wireless and wireline services; and providing users an easy migration to IP.

In addition to expanding its EV-DO rollout, Sprint is addressing business wireless adoption by offering a Managed Mobility Service, scheduled to launch later this quarter. The service will be a fully managed, end-to-end offering to offload administration of a large wireless deployment throughout an enterprise.

Sprint says it is erasing the barrier between wireless and wireline with its PCS to Office service, and VoIP and wireless integration. And it is easing user migration to IP with services such as its Multiprotocol Label Switching (MPLS) VPN service.

The carrier also talked up its merger deal with Nextel Communications. In December the two companies announced a merger agreement valued at $35 million. Sprint’s CEO Gary Forsee says he expects the deal to close in the third quarter pending regulatory approvals. The joined wireless companies will become the third largest mobile carrier serving 41 million customers.