The announcement of Sprint Enterprise Mobility Inc. is a clear sign of the growth in voice and data applications for large business users, as well as the need for a general contractor that companies can hire to oversee integration efforts, two industry analysts said.
"There's quite a bit going on in this area, and it will get bigger," said Roger Entner, a Boston-based industry analyst at Ovum.
"Sprint anticipates mobility solutions growing phenomenally over the next two years, and they see nobody else fulfilling the need for advanced mobility solutions," added Gene Signorini, an analyst at Yankee Group Research Inc. in Boston.
Bill Halbert, president of the new subsidiary, said Sprint Enterprise Mobility will fill a need not being met by small wireless integrators or the big professional services companies such as Electronic Data Systems Corp. or IBM.
"There isn't in the market an end-to-end mobility solutions specialist with the backing we have here at Sprint with a large trusted brand," Halbert said in an interview last week. "We will take prime contract responsibility and help organizations find their way through the maze of boutique houses and all the development standards and technologies."
Big companies need insights on how to start such projects, how to integrate them into legacy systems and how to take "a total systems approach," he added.
Halbert said Sprint will be a large integrator that will "absolutely have subcontractors." For example, the subsidiary might hire a small contractor to put a sales force automation tool on a handheld, he said.
About half the applications Sprint will provide will be custom-made for customers, while the other half would be off-the-shelf, Halbert said. But he said the subsidiary "won't be a product development shop" and will instead "intercept and work with key players, such as the Ciscos, the Nortels and the Nokias. ... Our opportunity is to be an early mover."
The new subsidiary is "already working with some customers," but none have agreed to go public, he said.
Sprint Enterprise Mobility's biggest obstacle, both Signorini and Entner agreed, will be to convince customers that it is not consulting to sell Sprint services and products. "A big question mark is how closely tied is the new entity to Sprint products and services?" Signorini asked. "If they are hawking Sprint services, they lose credibility."
Entner added, "What they are doing is a good idea, but to pull it off, they have to be agnostic about the technology and even the carriers they recommend."
Recommending another carrier than Sprint to a customer might be hard for the subsidiary, especially if the competing carrier joins a project and starts pushing Sprint Enterprise Mobility "against the wall," he said.
Entner projects enormous cell phone and wireless data growth in coming years, although he said the professional services market for mobility applications is "not very large today" and is perhaps US$200 million annually. Overall, the wireless industry in the U.S. contributed about $92 billion to the U.S. gross domestic product in 2004, and will be bigger than the U.S. automobile industry within five years, Entner said in a recent report he wrote for the Cellular Telecommunications & Internet Association, a Washington-based industry trade group.
Neither analyst believes another cellular provider will jump into mobility professional services, at least right away, giving the new subsidiary some room to attract customers.
In July, Sprint Nextel announced Sprint Mobility Business Assessment, a consulting service that provided customers an audit of current wireless deployments and recommendations for optimizing their investments. That unit has been folded into the Sprint Enterprise Mobility subsidiary and will become the initial part of the service that is offered, Halbert said.
Halbert came to Sprint Nextel nearly a year ago and immediately before that had been managing director of integrated communications technology at BT Group PLC.