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Baby Bells Calling On Services to Increase Sales : Competition: Analysts at brokerages say the add-ons offer significant sources of revenue for the companies and cost them very little to provide.

September 18, 1990|LORI DODGE | ASSOCIATED PRESS

ST. LOUIS — The boss needs you to call a client in another part of the country right away, but you do not have the phone number at your fingertips. Relax. Directory assistance can dial it for you.

Expecting an important call at home? You can tell whether the call is for you or for your spouse with personalized telephone rings.

These are just some of the newer services the nation's six regional telephone companies are now offering or preparing to offer their customers. And with changing lifestyles and the Baby Bells' hunt for more revenue, there are many more such services on the way.

"It is a major new source of revenue," said Marianne Bye, an industry analyst with Shearson Lehman Hutton Inc., of the service offerings. "It's also a high-margin area for the company--meaning that it costs them very little to provide."

Clayton Brown, an analyst with A.G. Edwards & Sons, said telephone companies are only limited by the sophistication of their networks.

"Little by little, as they improve their network, they can offer more and more services, which will enhance their revenue a bit more," Brown said.

For St. Louis-based Southwestern Bell Telephone Co.--which serves 9.5 million homes and businesses in Missouri, Kansas, Arkansas, Oklahoma and Texas--add-on services account for about 13% of billed revenue. More than half of its customers have at least one of the custom-calling features, the company says.

"It's a significant revenue stream," said Southwestern Bell spokesman David Martin. "They cover their costs many times over."

BellSouth Corp. of Atlanta anticipates that its add-on services will provide about $65 million in revenue to the company this year. Spokesman Terry Johnson said BellSouth expects that amount to more than triple in two years and to increase sixfold by 1994 as technology improves and certain regulatory matters are resolved.

Other companies could not provide revenue breakdowns.

The most popular add-on, Baby Bells say, is Call Waiting, which tells a customer already on the phone that he or she has another incoming call and that allows that person to answer it. This feature is available in most of the country. Call Forwarding, Three-Way Calling and Speed Calling also are becoming more available and more popular, experts say. At Southwestern Bell, for instance, those features are offered to roughly 90% of the company's territory, the company said.

The cost to the consumer for each add-on usually ranges from $2 to $10 a month, the companies say.

One feature, however, has sparked a controversy: Caller ID--which displays the number of an incoming call on a small video device. As offered by Bell Atlantic, the feature is priced at about $6.50 a month, plus a charge of between $60 and $80 for the viewing device.

Businesses like this service, but it has come under fire from privacy advocates, and some states have outlawed it. A Pennsylvania court, for instance, declared it a violation of wiretap laws.

So far, Caller ID is available in six areas of the country. In addition, at least 22 states are debating whether to allow it.

As for the other services now offered, some of the more unusual are:

* The personalized telephone ring. As many as three phone numbers may be combined on one phone line, with a slightly different ring for each.

* The lazy person's phone book. When a customer calls directory assistance, a recorded voice provides the number and, for an extra fee of around 30 cents, will dial it.

* The distinctive listing. If your name is John Smith and you want to stand out among the sea of other John Smiths in the telephone book, you can have your listing appear in a different type face. There is an initial charge of around $6, and a $3 monthly fee.

* Call Cue. This service offers automatic redialing of the last number you attempted to call; if the other line is busy, it will continue redialing for you.

* Call Blocker, Call Trace and Priority Call. These provide customers with distinctive rings for each of three selected phone numbers for incoming phone calls.

* Call Return. With this, the customer can automatically dial the number of the last incoming call, whether or not the original call was answered. Should the line be busy, the customer can hang up, but Call Return will automatically keep dialing the number and a special ring will notify the customer when the line is free.

Jolene Meyer, district manager of new product development for Southwestern Bell, said Call Return is the most popular of the newer features.

"Call Return is the most popular of the group, I think, because it's comparable to Call Waiting," Meyer said. "The customer doesn't have to do anything. It's kind of passive. When we're out in the back yard and we hear the phone ring, we're reminded that we have that service and we have the option of answering it now or later."

Phone companies say that because of the technology involved in linking central offices, it may be a number of years before the add-on services are available to all customers. But the demand is definitely there, they say.

"Our lifestyles are demanding more control," Meyer says. "People are kind of tired of having their chains pulled every time the phone rings.

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