FRAMINGHAM (09/17/2003) - Sprint Corp., the third-largest IXC, this week announced a plan to reduce costs while reorganizing its business structure.
The carrier's goal is to reduce operating expenses by US$1 billion annually through 2006. That represents a total cost reduction of 5 percent to 7 percent, the company says.
As part of that plan, the company announced that it would outsource a handful of its application management and development requirements to Electronic Data Systems Corp. and IBM Global Services. Sprint says it expects to reduce costs by $150 million over the next five years through these separate outsourcing deals.
The carrier is also planning to consolidate systems, eliminate redundancies, automate processes and enable certain functions.
In addition to lowering costs, Sprint is reorganizing the company. Today, the carrier operates with three divisions: local telecommunications, global wireline voice and data services, and wireless. It's now dividing operations by market segments, which include business and consumer customers.
While the carrier has always sold its services to residential and corporate users, it's now combining efforts in the local, global and wireless arenas to offer customers more coherent bundled services.
Sprint has been working on integrating its service lines for some time. In fact, it's in the process of rolling out a wireless-data-to-VPN service. The carrier would not divulge any details on the service other than to say it will be available by year-end.
Overseeing the effort is Len Lauer, who was recently tapped as Sprint's president and CEO. Lauer is also the CEO of Sprint PCS and will hold both executive titles going forward.