AT&T to stop marketing traditional long-distance

PhotonBoy

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http://www.chron.com/cs/CDA/ssistory.mpl/business/2695813

"NEW YORK -- AT&T Corp., the nation's largest long-distance company, will stop seeking new customers for its traditional consumer long-distance service, once the bedrock of the company known as Ma Bell.

The company will continue to serve its existing residential customers but will no longer pour roughly $1 billion a year into winning new ones, AT&T said today as it reported sharply lower profits for the second quarter.

Instead, AT&T will bet its future on providing telecom and data services to business, currently 75 percent of its revenue, and selling residential customers new technologies, such as phone service over the Internet...."

I found this fact to be surprising, but not totally unexpected. The advent of the internet and VoIP has made distance for both data and voice a non-issue. I think that long distance as we know it now will complete disappear in a few years. You'll soon be able to pick up your phone and call anywhere in the world for a fixed, flat rate per month.
 

PhotonWrangler

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It doesn't surprise me too much. The ROI on residential customers has got to be a lot worse than it is for business customers. A business customer might give them several a few thousand per month gross, while the amount of customer interaction is really low per individual line. On the other hand, a residential customer might be giving them $15 per month and requires more interaction with the customer, meaning more CSRs, higher billing costs, etc. By going after the business customers only, they're really cream-skimming.
 

DieselDave

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2-3 years ago the average residential customer was billing about $15-20 a month. I know this because my Uncle owns a small long distance biz and I did some work with him. Once billing drops below $13-$15 a month the profit becomes so slim as to not make it worth the effort unless the customer foregoes a printed bill and pays on-line. I think Flat rate will replace traditional long distance in the short run followed by bundled service being the method of choice. VOIP has been tried and re-tried but until it makes big improvements it's not the answer.

The long distance biz is in bad shape right now. The cell phone companies are in the drivers seat but I haven't seen anyone jump in to take the lead. Why oh why don't we have a cordless phone for our house, it could even be WIFI if they can figure out VOIP, that switches to cellular 500' from our home? You have Alltel, GTE, Bell, ATT and others offering all those services but for some reason they can't seem to integrate them.
 
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