AT&T raises the stakes in US battle over long-distance calls
Wednesday 01 September 1999
How much further long-distance rates might sink is unclear, as is what impact this will have on European calling charges.
"What's happening in the US long-distance market is what's going to happen in Europe in the next four to five years," said James Ross, an analyst with ABN-Amro.
"Most people think, in the end, we are heading to calls costing nothing."
The industry yesterday was still digesting news from the leader of the pack, AT&T, that it is to reduce long-distance rates by 30 per cent for all customers signing up to a new plan.
Under the package, customers will be able to call from one side of the country to the other for just 7 cents a minute at any time.
AT&T, which commands 50 per cent of the $41bn consumer market in the US, is responding to similar plans introduced by its main competitors, MCI Worldcom and Sprint.
They have cut long-distance rates to 5 cents a minute for evenings and weekends with higher rates during business hours.
The moves are only the latest in an accelerating downward slide in long- distance rates in the US that is changing all the industry's formulas for revenue generation. All the companies hope to offset dwindling incomes from voice carriage with growing revenue from data transmission and wireless services.
AT&T had been hoping to resist separating out long-distance calling in such a price war, planning instead to focus on building bundled packages of services for its customers, incorporating wireless, Internet and long- distance rates.
The company hopes that by offering the single, any-time-of-day, rate of 7 cents it will trump the more complicated offers of its competitors that still distinguish between peak and off-peak calling times.
"It's amazing how complicated the industry can make saying hello," commented Michael Armstrong, the chairman of AT&T.
- 1 This 'woman calls police to order pizza' story isn't going where you're expecting
- 2 Axe wielding man shot dead after attacking four New York policemen on busy street
- 3 Watch what happened when food critics were unknowingly served McDonald's
- 4 Jimmy Carr's Oscar Pistorius joke goes a bit too far at the Q Awards
- 5 Ottawa shootings: Bruce MacKinnon's cartoon is the perfect tribute to soldier Nathan Cirillo
Of course, teenage girls need role models – but not like beauty vlogger Zoella
Cameron is warned 'no possibility' of UK reducing immigration and that bid to bring in quota on migrant workers would be illegal
Support for EU membership 'at highest level since 1991' with most Brits wanting to stay 'in'
Thousands with degenerative conditions classified as 'fit to work in future' – despite no possibility of improvement
Attacks on 'Ukip Calypso' show how skewed people’s priorities are
Poppy Appeal 2014: This is why I won't be wearing a red poppy this year
iJobs Money & Business
£60000 per annum: Ashdown Group: Compensation and Benefits Manager - Compensat...
£30000 - £35000 Per Annum plus excellent benefits: Clearwater People Solutions...
£24000 - £28000 per annum + bonus & benefits: Ashdown Group: IT Business Syste...
£50000 - £90000 per annum + benefits: Ampersand Consulting LLP: Markit EDM (CA...