Sprint and IBM Announce Comprehensive Business Agreements

Five-year customer services contract; additional pacts reinforce long-term IBM-Sprint relationship

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OVERLAND PARK, Kan., & SOMERS, N.Y. - 04 Feb 2004: Sprint and IBM today announced a five-year, multi-billion dollar customer-service agreement between Sprint and IBM Business Consulting Services. This agreement marks a bold new strategy by Sprint to take its consumer support to the next level of service and cost performance and involves implementing major transformational process initiatives for all aspects of customer service.

The agreement is the core of Sprint's new consumer customer service strategy that is expected to enable Sprint to significantly improve its customers' service experience. Teaming with IBM will enable Sprint to have greater flexibility to scale to service according to demand and to adapt in real-time to changing market conditions and new product and services offerings.

IBM expects to help Sprint dramatically improve customer satisfaction through better customer segmentation, more efficient call routing, reduced average call handle time and a higher rate of first call resolution. In addition, Sprint's customer self-service tools will be significantly enhanced with the implementation of more user-friendly interactive voice response systems and web-based services. Sprint's agent systems and call routing technology will be transformed to significantly improve efficiencies. IBM will provide ongoing consulting support for all Sprint customer service processes, in order to continually improve customer satisfaction while driving operational efficiency.

IBM will also take over management of Sprint's existing vendor-operated call centers and will assume management of the Sprint-owned Nashville, Tenn., call center. Sprint will continue to operate its remaining customer service centers. In addition, the Dallas center serving long-distance customers will be consolidated into the existing Fort Worth, Texas, service center on April 30, 2004.

As a result of these actions, in addition to significantly improving the customer experience, Sprint estimates that its customer service costs should be reduced by an estimated $550 million over the next three years.

IBM Business Consulting Services last year announced similar business transformation initiatives with companies such as Procter & Gamble, Raytheon, Avnet, Lincoln Financial and UTC, and is also providing similar services to other communications carriers. In each case, IBM is transforming, integrating and managing key business processes, enabling those companies to become more flexible in adapting to market and customer variables in real-time.

Additional Pacts Reinforce Long-Term Relationship
In addition to this customer services agreement, IBM and Sprint also today announced a range of initiatives as part of their ongoing business relationship. These agreements bring together Sprint's leading-edge network and integrated communications service provider capabilities with the unparalleled applications, process engineering and customer management capabilities of IBM.

"These agreements represent a major collaboration between Sprint and IBM, allowing Sprint to simultaneously move forward on our top priorities - improving customer satisfaction, driving new sources of revenue and operating our business more efficiently and with greater flexibility," said Gary D. Forsee, chairman and chief executive officer of Sprint.

"Sprint is partnering with IBM to help transform their customer service processes so they can continue to build long-term, profitable customer relationships in a competitive telecommunications business environment, while at the same time delivering significant targeted cost savings," said Doug Elix, senior vice president and group executive IBM Global Services. "In addition, we are excited to expand our ongoing relationship with Sprint in a range of new ways that will keep both companies at the forefront of telecommunications solutions."

These new initiatives include a long-term business alliance that designates Sprint as a key IBM vendor for integrated wireless and wireline services and enables IBM to incorporate Sprint's national PCS wireless services and its global voice and data products and services into customized on-demand solutions for IBM customers. The combination of Sprint's leading-edge networks and services - with IBM's industry-leading global integration and IT expertise - is expected to deliver powerful solutions for enterprise customers and is expected to open significant new revenue opportunities for both companies as they collaborate to offer a growing portfolio of integrated, on-demand products and services.

In addition, Sprint will adopt IBM's Service Provider Delivery Environment (SPDE), which will make Sprint the first U.S.-based telecommunications provider to adopt SPDE on a large scale. By utilizing SPDE, enterprise customers can quickly port their desktop environment to a mobile communications environment, which Sprint, the leader in wireless data service, is ideally suited to provide. Sprint is investing nearly $100 million in the adoption of IBM's SPDE.

SPDE is an open-standards based architecture and gives wireless and wireline service providers the flexibility to introduce new voice, text and Internet-based services to their customers faster, easier and at a lower cost. Initially, Sprint and IBM are focused on mobility solutions through the Sprint Business Mobility Framework to deliver benefits of productivity, security and speed-to-market. Real-time enterprise applications driven by Sprint Business Mobility Framework allow for timely exchange of information between the business and its employees, customers and partners, resulting in increased revenue, cost savings and improved business execution. Joint marketing and sales by the two companies initially will focus on products that support the virtual workplace, thereby providing real-time and secure access to company applications available on wireline and wireless devices.

These new agreements build on a long-term relationship between IBM and Sprint that also encompasses the IT-development outsourcing the two companies announced in September 2003.

"From enterprise solutions to customer service to IT outsourcing, Sprint's relationship with IBM is designed to drive long-term success," Forsee said. "The concept of stand-alone wireless and wireline networks is rapidly diminishing. Real value to the customer comes from the ability to take the power of the network and desktop environment and integrate into a mobile environment. No company can do it alone. With Sprint and IBM, you have a combination of network and product innovation and reliability, customer knowledge and service experience that will distinguish them in the marketplace."

Cautionary Statement regarding forward-looking information
This news release includes "forward-looking statements" within the meaning of securities laws. The statements in this news release regarding the business outlook and expected performance as well as other statements that are not historical facts are forward-looking statements. The words "estimate," "project," "intend," "expect," "believe," and similar expressions identify forward-looking statements. Forward-looking statements are estimates and projections reflecting management?s judgment and involve a number of risks and uncertainties that could cause actual results to differ materially from those suggested by the forward-looking statements. With respect to these forward-looking statements, Sprint has made assumptions regarding, among other things, customer and network usage, customer growth, pricing, costs to acquire customers and to provide services, the timing of various events and the economic environment. Important factors that could cause actual results to differ materially from estimates or projections contained in the forward-looking statements include:

extent and duration of the current economic downturn;
the effects of vigorous competition in the markets in which Sprint operates;
the costs and business risks associated with providing new services and entering new markets necessary to provide nationwide or global services;

adverse change in the ratings afforded our debt securities by ratings agencies;
the ability of the PCS Group and the Global Markets Division to continue to grow a significant market presence;
the ability of the PCS Group and the Global Markets Division to improve profitability and reduce cash requirements;
the effects of mergers and consolidations within the telecommunications industry and unexpected announcements or developments from others in the telecommunications industry;
the uncertainties related to the outcome of bankruptcies affecting the telecommunications industry;
the impact to the PCS Group?s network coverage due to financial difficulties of third-party affiliates;
the uncertainties related to Sprint's investments;
the impact of any unusual items resulting from ongoing evaluations of Sprint's business strategies;
the impact of new, emerging and competing technologies on Sprint's business;
unexpected results of litigation filed against Sprint;
the possibility of one or more of the markets in which Sprint competes being impacted by changes in political or other factors such as monetary policy, legal and regulatory changes including the impact of the Telecommunications Act of 1996 (Telecom Act), or other external factors over which Sprint has no control; and
other risks referenced from time to time in Sprint's filings with the Securities and Exchange Commission ("SEC").

Sprint believes these forward-looking statements are reasonable; however, you should not place undue reliance on forward-looking statements, which are based on current expectations and speak only as of the date of this release. Sprint is not obligated to publicly release any revisions to forward-looking statements to reflect events after the date of this release. Sprint provides a detailed discussion of risk factors in periodic SEC filings, including its 2002 Form 10-K, and you are encouraged to review these filings.