Sprint Boosts Network Access Options with Expansion of SPA Ethernet

Event Summary

May 25, 2010 -- Sprint expanded availability of Sprint Provided Access (SPA) Ethernet, making it available as an access option for Sprint Global MPLS and Dedicated Internet Access (DIA) customers in northern New Jersey; Baltimore, MD; and Stockton, CA. Sprint is also expanding coverage of SPA Ethernet in ten existing markets, and it plans to launch the service in another 16 markets in 2010. SPA Ethernet offers business and wholesale customers an alternative to local exchange carrier (LEC) services for access to Sprint’s global network. Sprint also offers Sprint PCS Data Link and Sprint Business DSL access options to its Global MPLS and DIA services.

Quick Take

Analytical Summary

• Current Perspective: Moderate on Sprint’s announcement of expanded availability of Sprint Provided Access (SPA) Ethernet into four new markets (central and northern NJ; Baltimore, MD; and Stockton, CA) along with expanded coverage in ten existing markets and planned launches into 16 new markets later this year, because enterprises are increasingly looking to Ethernet services as a cost-effective access alternative to local exchange carrier (LEC) services. Sprint initially launched SPA Ethernet in December 2007 (see Sprint Adds Ethernet to VPN Access Portfolio, December 10, 2007) in 24 U.S. markets, and despite Sprint’s delay, expanded availability of Ethernet access to its Global MPLS and Dedicated Internet Access services allows a broader base of the carrier’s clients to opt for Ethernet access to its services.

• Vendor Importance: High to Sprint’s wireline network services organization, because the carrier undertook a major upgrade to its wireline infrastructure several years ago to support next-generation services, but since then Sprint had little new to say about network enhancements. Sprint's expanding Ethernet access services to 20 markets in 2010 enables the carrier to offer stronger end-to-end solutions to its Global MPLS and Dedicated Internet Access (DIA) clients. While the expansion is well behind the carrier’s initial launch of the service, Ethernet adoption by enterprise customers is still in the early stages and growing, so Sprint has not lost the market opportunity.

• Market Impact: Sprint’s U.S. expansion of SPA Ethernet is part of a larger wireline expansion initiative for 2010. In addition to the Ethernet access enhancements in the U.S., Sprint is expanding access to its Global MPLS network internationally, with MPLS access launched in Brazil and Canada in Q1 2010 and facilities in the Philippines and Thailand to be added later in the year. Sprint’s publicity around its international expansion reminds U.S. enterprises of the carrier’s continued focus on its global capabilities.

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Competitive Strengths and Weaknesses

Response & Recommendations

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