Sprint Taps IBM For Business-Technology RevampSprint Taps IBM For Business-Technology Revamp

Sprint is handing over operation of a number of call centers to IBM Global Services as part of an effort to cut costs while improving its customer service in the cutthroat wireless and fixed-line telephone markets. The companies said Wednesday that the multibillion-dollar agreement is a five-year deal, but declined to provide more specific financial terms.

Sprint and IBM also disclosed a marketing agreement under which they'll jointly sell mobile business-technology offerings, such as Sprint handsets that use IBM software to run business applications.

Under the services deal, IBM will assume operation of 22 Sprint call centers nationally and internationally. IBM will be responsible for managing and upgrading technology at the call centers, as well as managing staff provided by third-party outsourcing companies such as Convergys Corp.

IBM plans to revamp much of the technology now in use at the call centers. It will install new systems and software that will automate the routing of customer inquiries to live agents, interactive voice-response systems, or customer-service Web sites. "You want the inquiry to go to the most-appropriate vehicle as quickly as possible," says Lawrence Kenny, a telecom business leader at IBM.

By handing off call-center management and employing advanced technology, Sprint says it hopes to shave $550 million off its customer-service costs over the next three years. Such moves are essential as competition heats up in the growth-challenged telecom industry. In an interview with the Wall Street Journal published Wednesday, AT&T CEO David Dorman said he was willing to offer steep discounts to business customers in an effort to steal market share from competitors like Sprint and MCI. Not to be outdone, Sprint CEO Gary Foresee told a group of investment analysts Wednesday in New York that Sprint intends to be "aggressive in the marketplace--and put points on the board by outplaying our competitors."

Beyond cutting costs, Sprint is looking to boost revenue, which grew a meager 2.1% in the fourth quarter, by rolling out new services. Toward that end, Sprint will implement IBM's Service Provider Delivery Environment at its data centers. SPDE is a middleware blueprint that calls for the use of open standards such as Web services to let telecom providers more easily provision new customers and offer advanced premium functions such as access to third-party sports scores, weather reports, and other information. Says Terry Yu, Sprint's VP for product development, "We're building a more-flexible infrastructure that's directly tied to our business goals."