IQ News: Sprint Internet Passport to Aim for High-End Users in Internet Access Race

In its efforts to woo more die-hard consumer Web users, Sprint next week is kicking off its most auspicious acquisition campaign to date for Internet Passport, the company’s entry in the crowded Internet service provider market.
Supported by a $5-10 million campaign beginning next Monday, of which as much as $1 million will be dedicated to an online recruitment effort, the Kansas City telecommunications company is vying for Internet users who might be inclined to pay more than $19.95 a month for enhanced service and a reliable Internet connection. Sprint executives envision such users as those who want dependable access at home and at work.
“The next generation of [Web] users in particular will be those professionals who are motivated” by ISPs that can guarantee performance and time-saving capabilities, said Jim Dodd, vice president, Sprint Internet Services. “The marketing in the future will focus on those that use online services at work and at home.”
In identifying a potentially lucrative market in high-end users, Sprint becomes one of the first ISPs to buck the plain-vanilla, flat-rate $19.95 service plan that is the product promoted by most of its competitors. A relative newcomer to the ISP business, Sprint lags its traditional competitors AT&T and MCI in the race for subscribers and companies whose core product is Internet access, such as Erols Internet.
In addition, some members of the online service market, including behemoth America Online, also charge subscribers $19.95 per month, for both Internet access and proprietary content.
As a result of the intense competition, Sprint has been upgrading its service to distinguish itself in the cluttered marketplace and eventually enable it to break out of low-margin, flat-rate Internet access. The addition of a premium service, however, does not mean that its current Internet access plans will be discontinued. Sprint still plans to offer its current flat-rate plan and another payment plan, in which subscribers pay $1.50 per hour.
With media buys slated for national and regional newspapers and high-trafficked online directories and business-related sites, the centerpiece of the campaign will be the promotion of two new Passport features: a connection guarantee and a support staff. The “Get Connected” guarantee stipulates that if a Passport user cannot access the Internet, they will receive a $5 rebate, or a free week’s worth of access.
The support crew plan, dubbed Sprint Internet Personal Trainers, will be tested this fall and will be available commercially during the first quarter of 1998. Sprint eventually plans to make Internet Personal Trainers a premium service, for which Internet Passport subscribers will pay an extra fee.
The focus on high-end consumers marks a shift from the initial recruitment tactics used by Sprint.
Earlier this year, the company’s commercial launch was supported by a national television campaign that centered on the recruitment of a broad base of consumers. It then introduced a customized ISP offering called Private Passport tailored to potential customers’ entertainment and professional preferences.
It also expanded a crucial distribution network for Passport with a variety of partners that included Blockbuster and Simon & Schuster. More recently, Sprint announced it will participate in a test program for Intel’s Quick Web technology which is supposed to hasten the download time for graphics.
The efforts have helped Sprint amass an estimated 110,000 subscriber base. However, that number still lags significantly behind its rivals. AT&T’s WorldNet service has approximately 950.000 subscribers, while MCI, which calls its service MCI Internet has nearly 500,000 subscribers. Meanwhile, pure online rivals have subscriber bases in the millions, with AOL leading the pack with more 9 million subscribers.