SPRINT OPTIMISTIC DESPITE LOSSES

  US Sprint, the 50-50 telephone venture
  of GTE Corp &lt;GTE> and United Telecommunications Inc &lt;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 &lt;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.
  

