IQ News: INSIDER – Into The Race

Jim Dodd, vice president for Sprint’s Internet Services, waxes about the mid-’80s era of ‘obtuse’ on-line navigation, replete with 10mhz computers, 2400-baud modems and an archaic search language peppered with an occasional ‘slash, slash.’

Today, access, rather than speed or protocols, is the biggest hurdle on the Internet. Sprint is banking on the answer to incessant busy signals with its fledgling Passport service. ‘The whole launch strategy was predicated on the single most important goal of delivering easy to use, highly reliable service’ says Dodd, a 14-year product and marketing manager veteran at the long-distance giant.

To its advantage, Sprint owns perhaps the most comprehensive fiber-optic network in the U.S. Since 1,000 Internet service providers (including America Online) pay to use the SprintNet backbone, why not introduce its own consumer product?

Sprint has taken its time making that decision. Passport joined the ISP fray late, with a debut last summer. To date, it claims only 80,000-100,000 customers, a tiny slice of a market estimated by Boston’s Yankee Group worth $845 million in 1996 subscriber fees.

The low-key rollout is by design, Dodd says. While AOL and AT&T’s WorldNet were getting pounded by the press and consumers alike for access glitches, Sprint devised a two-tier strategy for the Passport brand. First, it wants to build subscribers through its eight million U.S. residential customers. Then it plans to recruit late adopters through alliances with retailers and businesses.

The current ad campaign, from J. Walter Thompson/San Francisco, boasts Passport is simple enough for techno-illiterate grandmothers and other ‘newbies’ to handle. In time, Dodd intends to give the jewel of its Internet business–the SprintNet backbone–more publicity. But he won’t be tucking Passport software in cereal boxes or embarking on a nationwide road show, ˆ la AOL or AT&T, to seed the market.

In one initial promotion, Sprint teamed with Blockbuster to offer free startup software with movie rentals. Dodd also cut deals with Viacom interactive publishers Simon & Schuster and Macmillan New Riders to bundle software with reference and game titles. More deals are on the way, Dodd says.

While many telcos see Net access as the latest enticement to keep their phone customers from jumping ship, Sprint is angling for ‘newbies’ to grow its overall subscriber base. ‘Sprint sees that Passport can be profitable on its own,’ says Yankee Group analyst Joe Bartlett, not just ‘a conduit for them to keep long-distance customers.’ –BW

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