Newspaper article The Florida Times Union

AT&T Announces Its Own Rate Cut New Plan Is in Response to Sprint, MCI

Newspaper article The Florida Times Union

AT&T Announces Its Own Rate Cut New Plan Is in Response to Sprint, MCI

Article excerpt

NEW YORK -- AT&T Corp. battled back against phone rivals yesterday by slashing long-distance rates to just 7 cents a minute for calls made any time. While the rates are bargains for frequent long-distance callers, average users might wind up paying more, not less, consumer groups warned.

People who sign up for AT&T's cheap rate must pay an additional $5.95 a month. Sprint, which helped trigger the price war, charges the same monthly fee for a rate of 5 cents a minute at night, and 10 cents at other times.

MCI WorldCom also offers weekend and weekday nighttime rates of 5 cents a minute, with daytime fees that go up to 10 cents a minute. Its monthly fee is $4.95. Another MCI plan charges just $1.95 a month, but daytime rates jump to 25 cents a minute.

The deals are great for callers who make 200 minutes or more of long-distance calls a month, industry experts say. AT&T says these users can save up to 20 percent off what they'd pay using traditional plans.

But the average residential customer makes about 80 minutes of calls a month, according to the Federal Trade Commission, too little to compensate for the monthly fees charged by AT&T and, in many cases, Sprint and MCI.

AT&T's customers on the average make even fewer calls, according to industry analysts. The company would not say how many of its customers are infrequent callers.

AT&T's plan is "a pretty darn good price for those who hare on the right side of the road," said Samuel Simon,chairman of the Telecommunications Research and Action Center, a consumer group. But "these plans are only aimed at the top end of the market, heavy users."

Still, AT&T insisted that its plan had wide benefits. Under the company's old plan, AT&T had charged 15 cents a minute around the clock with no monthly fee or 10 cents a minute with a $4.95 fee.

"We've developed a plan that is pegged to a significant percentage of our customer base," said Gene Lockhart, president of AT&T consumer services.

While MCI offers a $1.95 monthly fee, people who don't regularly check their watch may end up paying the far higher rate. …

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