Strange goings on at Sprint
Rating: if you’re not scared, you don’t understand the problem
By Annie Turner
John Styers is an amiable, entertaining kind of guy and has been hugely influential in driving the development of Sprint’s Mobile Media Network. However, his presentation at the Informa bash in New York last week brought to mind the British historian Lord Acton’s famous maxim that, “Power tends to corrupt and absolute power corrupts absolutely”.
This is how The Sprint Mobile Media Network is described at the official web site (www.sprintmedianetwork.com):
The Sprint Mobile Media Network enables marketers and advertisers to reach millions of wireless data subscribers through strategically targeted mobile web based advertising programs. Sprint’s scalable media platform delivers interactive mobile ad units to help marketers engage their desired audience & establish a two-way dialogue around products, services, brands & promotions.
The true situation sounds far scarier. This is what Mr Styers said in response to delegates’ questions after his presentation;
Where do people like Microsoft and AOL who have built their own [media] networks fit into the value chain and how do you compete against them in the value chain?
JS: Very simply, if it’s a WAP site, it has to go through my WAP server and I can serve whatever I want as that data comes across my server. I can block what they have, I can add my own, I can double up what’s already there. We’re willing to discuss the business model and then try to find the right way to play together, but the important part is that if I needed to, if I wanted to, I could cut them all off tomorrow.
How do you obtain consent from your customers?
JS: Did you fill out a consent form on the web? On TV? You don’t need consent, it’s push.
If a customer uses a [Google] search, would Sprint collect that kind of data to help profile customers?
JS: So if a consumer used search to go off portal could we follow what they were doing? Yes, but it’s not the intent to go that deep right now, but things can grow, just as that Google company started with a little nothing, now they are the Lex Luthers of the world. There is no question that you could say this could go anywhere you wanted it to go. That’s the whole beauty of setting up the architecture like this; you force the Googles of the world to the table. You force the Yahoo!s of the world to the table to say, “Let’s discuss how we all play in this,” because right now, Sprint has no involvement in the business model with Google whatsoever. We make zero. This is one means of a solution.
Are you saying that while consumers are surfing on the mobile Internet into off-deck sites and they’ll be served with ads that are nothing to do with would Sprint get involved in blocking or replacing those ads?
JS: If we wanted to.
Where’s the neutrality? Where’s the experience?
JS: Where’s the money? If it occurs without any involvement from the carrier and that’s not good, at least from our point of view.
You guys get money for data, don’t you?
JS: Depends on how you look at it. Data prices are compressing, we have unlimited data plans within Sprint and most carriers are heading towards unlimited data plans, so every piece of data you send across becomes a cost, not a revenue stream. And if revenues going to be in advertising, we’ve got to find a way that everybody plays and shares. So there are many media networks out there that are serving ads today off portal that have no commercial relationships with any carrier. It makes sense for them in the short term, I think in the long term, there should be a percentage.
At best you could say it’s a brave attempt to safeguard the user experience, at worst it’s a counter-productive, desperate exercise in control freakery. Over lunch, opinion seemed to be that Sprint had no chance what so ever of attaining the control and dominance it is looking for in the longer term – not least because there is much talk that the struggling operator is a take-over target itself.
Sprint does need to do something, it’s clear, having been overtaken for the first time ever in February in the data income-per-head stakes by its larger rival, Verizon. Whether Sprint’s Media Network proves to be the answer is doubtful.
In the last quarter, it lost 306,000 high margin, post-pay customers (who are the most likely to use data services) while T-Mobile added 783,000. Sprint’s revenue rose in the last quarter of 2006 by 9% over the same quarter in 2005, but it is still struggling to integrate the Sprint and Nextel networks and operations.
Interestingly, Mr Styers is leaving the company at the end of March to go solo. He didn’t like where the latest corporate shake-up left him. We wish him well and hope to see him at CTIA.
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