Sprint's Azzi talks about unlimited data plans, Wi-Fi offloading and QChat

with Bob Azzi, senior vice president of networks, Sprint Nextel

Exactly two years after Sprint Nextel (NYSE:S) inked its ground-breaking network management deal (called Network Advantage) with Ericsson (NASDAQ:ERIC), Sue Marek, Editor in Chief of FierceWireless, sat down with Bob Azzi , senior vice president of networks at Sprint Nextel, to talk about the long-term advantages of that deal, Sprint's Network Vision network modernization plan, whether Sprint will be able to keep up with mobile data demand and maintain its unlimited data price plan, and how the company plans to incorporate Wi-Fi offloading into its toolbox.  

FierceWireless: When I heard you speak at the PCIA Wireless Infrastructure conference you said you think the Ericsson managed services deal with Sprint was a success. Why?

Azzi:  Yes, it's a success. That's not to say that everything has been perfectly harmonious.  That would be impractical and no one would believe that in a relationship of this scale that everything could be ideal and prefect.  We have day-to-day problems to solve. But it fulfilled my hopes and went beyond my expectations.

I hoped that because I had this partner that my team would be more focused on the future. The reality is that I don't believe that Network Vision would have manifested itself in the way that it did without having Network Advantage in place.

From a pure cycle time of executives, attention of the team and redirecting resources away from the day-to-day and to the future we wouldn't be where we are today with Network Vision.

We talked to others in the world that had done this and they told us that we would be amazed at how  your attention gets focused on things that really matter to your customer when you have your partner attending to what is important but not something that will differentiate you. People expect the network to work.   So we rely on Ericsson to take care of that for us.

FierceWireless: You also credited Ericsson's Network Advantage project with Sprint's ability to keep up with the sudden surge in data usage.  Why are those related?

Azzi:When we got to point where our growth had returned and we needed to stay ahead of that growth we were able to tap into Ericsson's expertise. Being able to learn from their experience elsewhere in the world where there might be similar challenged allowed us to stay ahead of what was coming.

FierceWireless: Are you confident you can keep up with demand for data?

Azzi: I'm confident with the scale that Ericsson has in place that we can throw anything at them and we would find a way to respond.  We have had tremendous growth. We believe our call models for data are higher than our competitors because we have unlimited data. It's a funny thing about those plans, customers don't worry about using their phones. We think that's a good thing for customers.

I have a strong degree of confidence with the relationship we have built over the past two years that we have the partnership stable to respond however we need to.

FierceWireless: For now the plan is to keep the unlimited data plan?

Azzi: Yes, my job is to keep the capacity growing as is necessary to stay ahead of customer demand and keep the costs down so that we can improve our profitability. That's my job. We understand the position we have staked out with our combination of our device portfolio and our customer-friendly plans and what that means to our base and what it means to prospective customers. It's important for us to maintain that trajectory.

FierceWireless: Does Sprint currently off-load traffic to Wi-Fi?  Are you planning to do that?

Azzi:  Like all carriers, we believe that is an important element of our portfolio.  I would characterize that as a way to provide the overall best customer experience.  It can just make sense for a customer to be using a Wi-Fi network, notably at their home. I think it's a smart thing to do to offload traffic to a network that can handle it and is a good use of the spectrum that is available to customers in general.

We do Wi-Fi offloading now and we will do some more in the future.

FierceWireless:  There are a lot of different models for Wi-Fi offloading.  Some operators purchase the network, others rent space on another's network. Which model are you using, or going to use?

Azzi: We would consider all those models and will probably adopt models that are different from others in the industry. We don't own a portfolio of Wi-Fi hotspots like some others do.  So we will find a combination that works for us. Statistically 80 percent of the traffic on Wi-Fi is at home and at work. We work with our enterprise customers to understand how they view it.   

The enterprise is in a situation where they are dealing with the desires of their employees to bring their provider handset onto the premise yet the enterprise customer wants to make those devices a productivity tool. They will approach it differently. 

FierceWireless: Sprint recently launched the new QChat service, Direct Connect.  How is this different from the QChat product you launched a few years ago?

Azzi: It's an evolved product.  A lot has improved and changed in the client and how the client manages the RF conditions. We are seeing improved performance over the earlier version. We believe this will really be a solution our customers will want because iDEN has established the gold standard for sub-second instant communications, but it is a 2G technology and doesn't have a data capability. We now have a superior product to that. It provides sub-second capability and adds mobile broadband data capability, and in the next several months we will expand it to a 2 million-plus square-mile coverage footprint.  iDEN was limited to the iDEN network.  Since we are using CDMA we can open it up to the CDMA network which has a much larger footprint.

Also, globally we have had interest.  Some operators have expressed interest.  This is a CDMA-based technology but for customers that want a global interaction there is a bigger ecosystem than iDEN.

In my view, it's absolutely superior to the gold-standard iDEN.

FierceWireless: It's no secret that you have lost a lot of iDEN subscribers over the past few years. Will this new service stop the remaining iDEN customers from leaving?  How do you plan to transition those iDEN customers to this?  Many are very committed to iDEN.

Azzi:  Now that we have successfully launched this we believe it will accelerate the migration.  The base that we are focused on is the core push-to-talk user. Now we have a viable alternative that is superior. As we have been talking to the users now we have product to put in their hand.  Anecdotal feedback is that customers are seeing this as a superior service as well. That is great news for us. Now we have a real alternative for these customers.

We knew we had to have a service that would get customers excited and they would see a way to go to the next step in this product family. It will allow us to accelerate those migrations.

FierceWireless: If LightSquared is delayed because of these GPS concerns, is that going to delay Network Vision? 

Azzi: The GPS question will have to be resolved by LightSquared and the other agencies. There is a defined path and that's a good sign. There are testing plans in place. We are proceeding on the presumption that there will be a positive outcome. We don't deploy anything without the appropriate FCC approvals. We are not at a critical stage yet, but certainly if there is a delay, it will be something we have to work through. If it changes it will change the cost structure but it still makes sense to do it this way.

We will have to wait and see. We assume a positive outcome.  We acknowledge that it is a legitimate concern that the FCC must work through with LightSquared.

We have GPS in our phones and have an interest in making sure this works. We are supportive of LightSquared and are hoping for a positive outcome.