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SBC to Offer Bundled Service to Stem Losses

November 18, 2002|From Bloomberg News

SBC Communications Inc. will announce today it will combine local, long-distance and wireless calling with Internet access on one bill to stem customer losses and increase sales and profit, which have fallen in five straight quarters.

SBC, the parent of Pacific Bell, will not be allowed to offer the bundled service in California, although the San Antonio, Texas-based company is seeking to enter the state market by year's end.

Regional phone companies such as SBC can't sell long-distance in states where they dominate local calling before proving that their networks are open to use by rivals. SBC has received U.S. approval to sell long-distance in six states.

Customers can cut their bills by as much as $575 a year when purchasing bundled services. The move will boost sales and profit, Chris Sanborn, SBC's vice president of consumer marketing, said in an interview. Sanborn declined to elaborate.

U.S. phone companies are seeking to sell more services amid increasing competition and slower U.S. economic growth. SBC's third-quarter net income fell 15% to $1.77 billion on a 6.9% sales decline, excluding a wireless joint venture. The phone lines SBC serves fell 4.3% to 57.6 million in the quarter.

Customers who receive multiple services from a company are less likely to leave, analysts say. Verizon Communications Inc., the biggest U.S. local-phone company, announced a similar offer in August.

Shares of SBC, which operates in the U.S. Midwest, Southwest, California and Connecticut, rose 79 cents to $25.19 in New York Stock Exchange composite trading Friday. They have dropped 36% this year.

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