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Phone Firms to Roll Out Broader Service Plans

May 19, 2003|From Reuters

PHILADELPHIA — Several U.S. telephone companies plan to unveil broader product offerings as early as this week, including high-speed Internet access and wireless services at discounted prices, in the latest battle for high-spending residential customers.

The new promotions, confirmed late last week by analysts and company executives, will involve more than just a blitzkrieg of marketing and hype. As local and long-distance telephone companies enter one another's markets, carriers are scrambling to woo new customers and retain their existing subscribers to staunch shrinking revenues and dwindling margins.

"It's a very intense period of pricing and packaging to address competitive threats," said Yankee Group analyst Berge Ayvazian. "The battle is on to secure a 360-degree relationship with the customer."

Sprint Corp. is expected soon to announce new service packages that include unlimited long-distance, local and wireless telephone service for a flat rate, analysts said.

Sprint will use its Sprint PCS wireless stores to help sell its traditional telephone services as it expands into the local telephone market in more states, analysts said.

Overland Park, Kan.-based Sprint, the No. 4 U.S. long-distance telephone company, declined to comment.

Its larger rival WorldCom Inc., which is changing its name to MCI, plans to add a high-speed Internet access service to its Neighborhood by MCI calling plan that includes local and long-distance service, analysts said.

WorldCom declined to comment. The Ashburn, Va.-based company previously said it would expand its residential service offerings.

AT&T Corp., meanwhile, said it aims to forge several partnerships so it can resell wireless, high-speed Internet access and online content to its 40 million residential customers. AT&T expects to forge several resale or marketing pacts by the end of the year.

Customers like the convenience of paying one bill a month and the discounted prices of buying the services as a package, analysts said.

The companies, meanwhile, benefit because customers who buy more than one service from a company tend to stick with that carrier longer.

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