Sprint - Nextel 2010 Annual Report Download - page 6

Wireline
We provide a broad suite of wireline voice and data communications services to other communications companies
and targeted business and consumer subscribers. In addition, we provide voice, data and IP communication services to our
Wireless segment and IP and other services to cable Multiple System Operators (MSOs) that resell our local and long distance
services and use our back office systems and network assets in support of their telephone service provided over cable facilities
primarily to residential end-user subscribers. We are one of the nation's largest providers of long distance services and operate
all-digital global long distance and Tier 1 IP networks.
Services and Products
Our services and products include domestic and international data communications using various protocols such as
multiprotocol label switching technologies (MPLS), IP, managed network services, Voice over Internet Protocol (VoIP),
Session Initiated Protocol (SIP) and traditional voice services. Our IP services can also be combined with wireless services.
Such services include our Sprint Mobile Integration service which enables a wireless handset to operate as part of a subscriber's
wireline voice network and our DataLinkSM service, which uses our wireless networks to connect a subscriber location into their
primarily wireline wide-area IP/MPLS data network, making it easy for businesses to adapt their network to changing business
requirements. In addition to providing services to our business customers, the wireline network is carrying increasing amounts
of voice and data traffic for our Wireless segment as a result of growing usage by those wireless customers.
We continue to assess the portfolio of services provided by our Wireline business and are focusing our efforts on IP-
based services and de-emphasizing stand-alone voice services and non-IP-based data services. We also provide wholesale voice
local and long distance services to large cable MSOs, which they offer as part of their bundled service offerings, as well as
traditional voice and data services for their enterprise use. However, the digital voice services we provide to some of our MSO's
have become large enough in scale that they have decided to in-source these services. Although we continue to provide voice
services to residential consumers, we no longer actively market those services. Our Wireline segment markets and sells its
services primarily through direct sales representatives.
Competition
Our Wireline segment competes with AT&T, Verizon Communications, Qwest Communications, Level 3
Communications, Inc., other major local incumbent operating companies, cable operators and other telecommunications
providers in all segments of the long distance communications market. In recent years, our long distance voice services have
experienced an industry-wide trend of lower revenue from lower prices and competition from other wireline and wireless
communications companies, as well as cable MSOs and Internet service providers.
Some competitors are targeting the high-end data market and are offering deeply discounted rates in exchange for
high-volume traffic as they attempt to utilize excess capacity in their networks. In addition, we face increasing competition
from other wireless and IP-based service providers. Many carriers are competing in the residential and small business markets
by offering bundled packages of both local and long distance services. Competition in long distance is based on price and
pricing plans, the types of services offered, customer service, and communications quality, reliability and availability. Our
ability to compete successfully will depend on our ability to anticipate and respond to various competitive factors affecting the
industry, including new services that may be introduced, changes in consumer preferences, demographic trends, economic
conditions and pricing strategies. See Item 1A, “Risk Factors—Consolidation and competition in the wholesale market for
wireline services, as well as consolidation of our roaming partners and access providers used for wireless services, could
adversely affect our revenues and profitability” and “—The blurring of the traditional dividing lines among long distance, local,
wireless, video and Internet services contribute to increased competition.”
Legislative and Regulatory Developments
Overview
Communications services are subject to regulation at the federal level by the Federal Communications Commission
(FCC) and in certain states by public utilities commissions (PUCs). The Communications Act of 1934 (Communications Act)
preempts states from regulating the rates or entry of commercial mobile radio service (CMRS) providers, such as those services
provided through our Wireless segment, and imposes various licensing and technical requirements implemented by the FCC,
including provisions related to the acquisition, assignment or transfer of radio licenses. CMRS providers are subject to state
regulation of other terms and conditions of service. Our Wireline segment also is subject to federal and state regulation.
The following is a summary of the regulatory environment in which we operate and does not describe all present and
proposed federal, state and local legislation and regulations affecting the communications industry. Some legislation and
regulations are the subject of judicial proceedings, legislative hearings and administrative proceedings that could change the
manner in which our industry operates. We cannot predict the outcome of any of these matters or their potential impact on our
business. See Item 1A, “Risk Factors—Government regulation could adversely affect our prospects and results of operations;
the FCC and state regulatory commissions may adopt new regulations or take other actions that could adversely affect our
business prospects, future growth or results of operations.” Regulation in the communications industry is subject to change,
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