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Sprint PCS Stores Diversifying, Expanding

Sprint PCS is diversifying the wireless-service offerings in its company-owned stores and adding new stores at a quick pace.

At the end of August, the stores began selling Virgin Mobile-branded prepaid service as their first non-Sprint-branded wireless service. They also began offering Sprint-branded local land-line service for the first time as part of the new Sprint Complete Sense package, which bundles Sprint-brand local and long-distance landline services with Sprint wireless service in one monthly bill. Previously, the stores sold only Sprint long distance.

All of the services will be available in more Sprint-owned stores in the coming months and years, promised Ali Zanjani, president of retail for Sprint’s PCS division. The carrier’s 550 stores will multiply to at least 660 stores by the end of this year and to 800 stores by the end of 2004, the company said. “On average, we’ve been opening 100 stores per year since 1997 [when Sprint PCS launched service],” Zanjani noted.

Those numbers exclude Sprint-branded stores owned by Sprint’s affiliate carriers, which operate their own networks but brand them with the Sprint name. Their stores number roughly 200, the company said.

“Our own store channel is a very viable channel and, relative to our competitors [in terms of owned stores], we’re understored,” Zanjani said. “There’s no reason to believe we’ll be any less aggressive in the foreseeable future.”

Sprint-owned stores, a spokeswoman added, provide the higher level of customer service that consumers are seeking as more sophisticated wireless services become available. “This level of service, which is proven by higher customer satisfaction results, is achieved at these dedicated stores,” she said.

Although it might not have as many carrier-owned stores as its competitors, Sprint boasts that it has more distribution points [carrier stores, retailers, and agents] than any of its competitors. “We have the largest distribution nationwide,” a spokeswoman said. “At the end of the second quarter, Sprint had almost 17,600 distribution points, an increase of almost 1,000 in the second quarter of 2003,” she said.

Some of the distribution points not operated by Sprint already sell Virgin’s prepaid service. Virgin’s distribution includes Best Buy, Circuit City, Media Play, Sam Goody, Target, Wal-Mart, Virgin Megastores and select bookstores.

Now that Sprint stores also sell Virgin service, Sprint has returned to the prepaid market, having previously dropped two “experiments” in selling Sprint-branded prepaid service, Zanjani said. Six months ago, Sprint dropped a test of Sprint-brand prepaid service through one national retailer, and two years ago, the carrier discontinued prepaid sales in a single test market, where the service was sold through all of Sprint’s channels.

Zanjani said he believes the Virgin-brand prepaid service will be successful in Sprint stores. “At the end of the day, prepaid can be profitable only if it’s segmented properly and presented to a group of customers who are not candidates for post-paid service,” Zanjani explained. Virgin’s prepaid service “rings with the youth segment and taps into the value-add of the brand,” he said.

“Building your own [prepaid] brand is very costly and might not always succeed.” The Virgin service, he said, is a “proven success.”

Zanjani didn’t rule out sales of more non-Sprint-brand telecom services through Sprint stores, but he said, “right now, Virgin is it for the foreseeable future.” One potential addition could be home broadband access.

Virgin’s service uses the Sprint network, and Virgin Mobile USA is a 50/50 joint venture between Sprint and Virgin Group. Although other companies buy airtime wholesale from Sprint to market their own brands of wireless service, Zanjani said it was unlikely those companies’ services would be added to the Sprint store selection. He cited “the value that the Virgin brand brings to the table” in the decision to begin offering Virgin service in Sprint stores.

To promote Virgin service, Sprint PCS stores have rolled out a “full complement of POP and merchandising fixtures appropriate for the number [one] of Virgin SKUs and Top Up cards,” Zanjani said.