SPRINT OPTIMISTIC DESPITE LOSSES
US Sprint, the 50-50 telephone venture
of GTE Corp <GTE> and United Telecommunications Inc <UT> set up
last June, is optimistic despite expecting to report a net loss
of about 500 mln dlrs this year.
     David M. Holland, president of US Sprint's Dallas-based
Southwest Division, told Reuters in an interview that he did
not know what it would report for the first quarter, but agreed
that for the year the company should have about the same
results as last year when it lost "about 500 mln dlrs."
     He noted the company was slated to spend 2.3 billion dlrs
over "two plus years" to set up its network.

    Holland added that Sprint was still paying almost 500 mln
dlrs a year to American Telephone and Telegraph Co (T) in order
to lease its lines.
     He said 16,000 miles of its 23,000 mile fiber optic
telephone line are now "in the ground," and 7,000 miles are
operable.
     By the end of the year, he said, 90 pct of the company's
subscribers will be carried on its fiber optic lines (instead
of leased ATT lines), compared with 60 pct by the end of the
second quarter.
    Fiber optic lines, which send digital light impulses along
microscopic glass lines, is quicker, more accurate and more
economical than traditional copper cables. A fiber optic line
the diameter of a dime can carry the same amount of information
as a copper cable 20 feet in diameter.
     "By the end of the year, we will have the capacity to
carry 50 pct of all U.S. long distance phone calls," Holland
said.
    He said ATT currently controls about 80 pct of the U.S.
long distance market, with MCI Communications Corp <MCIC> about
10 to 12 pct and Sprint five to seven pct.
     Holland said Sprint's rates, which were 50 pct lower than
ATT when it did not pay to gain access to local telephone
exchanges, were now about 10 to 12 pct lower now that all the
companies have equal access. He said the company was cutting
back its advertising by about 30 pct this year.
     At the same time, he said Sprint had increased its total
number of customers to four mln from two mln from July 1986 to
last January.
    "We've captured the fiber high ground, shown the importance
of it," he said.
     Concerning the deregulation of ATT, Holland said he
believed ATT "should be given some flexibility, but should be
regulated on pricing plans."
     "They're so dominant in the market place," he said, adding
that ATT should be deregulated when "there is true competition
in the marketplace."
     "It takes time to prove ourselves and a lot of money," he
said, adding, "maybe two to four years out, it's hard to say."
    Holland said he was not concerned about talk that Sprint's
two owners might be squabbling or that corporate raiders, such
as the Belzberg family in Canada, might be putting pressure on
them to sell off their loss-making Sprint holdings.
     "They are two excellent partners who have stated time and
time again their support of US Sprint," he said, adding that he
was "amazed" at industry talk that the two companies might be
arguing. "There's no evidence of that," he said.
     He said Sprint's progress in such areas as revenues,
number of customers and construction was on track, even "ahead
in many areas."
    Looking beyond the United States, Holland said Sprint
currently had direct access to 34 countries and aimed to be in
90 pct of the Free World nations by 1988.
    "We want to be in every country that ATT serves," he said.
    He said Sprint currently does not have access to Mexico but
was working on it.
     He noted negotiations between Mexico and GTE Sprint, the
forerunner of US Sprint, had been broken off by the September
1985 earthquake which had devastated the nation's telephone
network.
 Reuter
