World Telecommunication Day 1999 |
Consumers are being bombarded with a wide range of telephone options, from prepaid long-distance and cellular phone cards to toll-free lines and cheaper rates. Rates are lower than ever before in some countries, thanks to deregulation and privatization. They are continuing to fall fast.
''As prices drop, the volume of phone traffic grows,'' says Gabe Battista, president of Talk.com, a long-distance carrier in Reston, Va. ''That's what we've seen domestically and internationally. Rates are significantly lower than they were five years ago.''
In the United States, for example, both large and small long-distance phone companies have been cutting rates dramatically over the past few weeks. MCI Worldcom is offering rates of 5 cents a minute after 7 P.M. on weeknights and weekends, while AT&T has rates of 7 cents a minute anytime. Some smaller carriers are offering rates as low as 3.5 cents a minute. New carriers with rates of 5 cents a minute anytime include IDT Corp. and GTC Telecom.
MCI's recent agreement to acquire Sprint in a $115 billion stock swap is an indication of the intensity of competition in the long-distance market. The two companies must now convince regulators that the deal would benefit consumers, a process some analysts say will be difficult to do, given the current climate in long-distance pricing.
In Europe, competition is equally tough. Sweden's Tele2, a long-distance provider, started offering free Internet access in July to consumers picking Tele2 as their telecommunications provider for long-distance calls. This was part of the change that came on Sept. 11, when consumers in Sweden were able to dial long-distance calls through alternative phone carriers without having to dial a three-digit access code.
Over the past year or so, other European providers of Internet services in Britain, France and Denmark have waived monthly service fees as well and begun charging consumers only for the time spent on-line.
The Britain-based cellphone giant Vodafone AirTouch announced in September its intention to become a free Internet service provider. It also introduced BulletIN, a range of free interactive services for its cellular phone customers, including news, stock prices, weather, a virtual personal assistant to remind users of important dates and full e-mail service.
''We're seeing increased customer demand for innovative offerings and enhanced services,'' says Ian Gray, managing director of Vodafone Retail. ''BulletIN is another extension, enabling customers to gain access to e-mail everywhere.''
In Japan, where time spent on-line can be expensive, new Internet ventures and cellular phone operators are offering consumers cheaper options. Microsoft Corp. and Softbank Co. of Japan recently started a venture that aims to offer consumers lower prices for on-line access, selling high-speed Internet services for under $86 a month, the rate national carrier NTT DoCoMo plans to charge subscribers for a high-speed connection.
For consumers without computers, SBC Communications Inc. of San Antonio, Texas is rolling out an e-mail-only communications service in some parts of the United States for less than $10 a month
The service, called eMessage, requires users to buy a $180 keyboard and screen, allowing those without PCs to communicate by e-mail using their phone line. Consumers can receive, read, type and send e-mail on the device. Information appliances such as this are becoming increasingly popular.
Says Steve Dimmitt, SBC's vice president of marketing: ''The simplicity and affordability of eMessage will deliver information technology to customers who have been traditionally on the low end of the technology curve.''
More and more innovations in the telecommunications field should be available to consumers in the next few years. ''Telecommunications firms must be more than data-centric,'' says Pascal Aguirre, a principal of Renaissance Worldwide Inc., an information technology consultancy based in Newton, Mass. ''They have to get beyond just connectivity services.''
By offering consumers more and more options, phone companies sharply expand their markets, setting the stage for lower prices. In Canada, for example, more than half the population is expected to use mobile phones within the next four years, according to a recent report published by International Data Corp. (IDC) in Toronto. Lower prices and new services should expand the mobile phone market in that country by between 20 percent and 30 percent a year, to 16.6 million subscribers in 2003 from 6.7 million in 1999, IDC says.
Janet Purdy Levaux