Tellabs is already well entrenched in Sprint's network, having won much of its access business in the late 90s. But this new request for proposal (RFP) calls for next-generation access equipment; and, while Tellabs' gear won't be ripped out, Sprint is making it bid against Calix and Entrisphere (and their respective partners) for its more advanced access applications.
"They want C2P [circuit to packet], FTTC [fiber to the curb], FTTP [fiber to the premises], standard DLC [digital loop carrier] functions, lots of DSL, and nobody has it all," says one source who has seen the RFP.
Sprint's triple-play RFP was actually issued more than a year-and-a-half ago, sources say, and the carrier has been "close" to picking a winner several times since. The problem, they say, is that Sprint has reorganized a few times since the RFP was issued and the RFP itself is "forward looking" -- it asks for a menu of services and features that, at the time of issue, not one single vendor possessed in a single platform. Prior to issuing this RFP, AFC (now Tellabs) and Alcatel (NYSE: ALA; Paris: CGEP:PA) accounted for most of Sprint's access gear business. Alcatel was the minority supplier and, in recent months, it has canceled its next-generation Litespan DLC product, choosing to focus on IP DSLAMs instead (see Alcatel Cancels New Litespan DLC). With Alcatel more or less bowing out here, a source says Sprint "really wants to get a viable second supplier."
Of course, to muscle into a key Tellabs account, companies like Calix and Entrisphere needed help and, according to our sources, they got it. Both privately held vendors have partners fronting them in the effort. Nortel Networks Ltd. (NYSE/Toronto: NT) has been working closely with Calix to resell its products, and Nortel is a supplier to Sprint. Lucent Technologies Inc. (NYSE: LU) has been working with Entrisphere, and Sprint was an early customer for Lucent's Stinger DSLAMs.
While we don't yet have details on all the technical specifics in Sprint's triple-play rollout, we do know that the carrier has embraced a grab bag of access strategies in the past and, apparently, it will continue to do so.
Sprint currently serves about 7.9 million access lines in its franchise territories in 18 states, and several carriers in 36 states provide services using its facilities.
In the 90s, Sprint used Multipoint Multichannel Distribution Services (MMDS), a line-of-sight wireless technology to provide video and high-speed data services in some areas. It halted those activities in 2001 but still services some MMDS customers.
More recently, the company has been openly toying with other wireless technologies such as WiMax (see Sprint's Got WiMax Plans).
Otherwise, the company has worked to bundle its mobile phone services and residential long-distance plans. It offers dialup Internet access and DSL via an arrangement with EarthLink Inc. It has also added video services through a partnership with EchoStar Communications Corp.
Sources have no direct knowledge of how lucrative Sprint's triple-play buildout will be to Tellabs, Calix, or Entrisphere, but the company said it will spend "approximately $900 million to expand DSL coverage, add new retail outlets, and continue its circuit-to-packet conversion," in a statement released today.
Sprint hasn't said what its triple-play services would cost, but it did give some range of possibility when referring to a network trial in October 2004. During an earnings conference call, Michael B. Fuller, president and chief operating officer for Sprint's Local Telecommunications Division, talked up one triple-play trial in Fayetteville, N.C.:
In Fayetteville, for example, Time Warner offers their triple-play for $127, which is about $40 for voice, $45 for high-speed, and $43 or so for video.
We've got a response plan there that we are trialing that prices unlimited voice at $39, high-speed data at an initial price of $30 on a discount basis, and video for $35. So we're very price competitive with them. Our price plan comes in just under theirs and that's been effective with [customer] win-back.
In addition to trialing triple-play services, tinkering with WiMax, and selling satellite TV services, one source says Sprint is also running four FTTP trials.
Sprint and Calix declined to comment for this article. Entrisphere did not return calls by press time.
Tellabs, however, reaffirmed its incumbency status inside Sprint. "They're a very important customer for us, and we believe our incumbency is favorable to the activity there," says Stu Benington, Tellabs' director of global portfolio marketing. "Operators tend to continue to want to get return on their investment… and, while there is no panacea technology, the best you can do is have a platform that, as the markets and customers dictate, can go in a number of different directions." — Phil Harvey, News Editor, Light Reading