Has anyone seen this Reuters 12/31/96
I have seen parts of it but that was last year in 96.
YEAREND-U.S. telecom winners decided by marketing
Reuters Story - December 31, 1996 12:47
FINANCIAL TEL ENT US RET MRG GB CORA T FON WCOM MCIC BT ECI TAN NCP BEL NYN PAC V%REUTER P%RTR
------------------------------------------------------------------------
Nick Louth
NEW YORK, Dec 31 (Reuter) - After sparring in 1996,
regional Bells and long-distance phone companies will finally
start brawling for real in many markets in 1997, but the big
punches will be thrown in marketing, not technology.
New ways to find and keep customers, and pushing brand
images will increasingly differentiate companies which already
have most of the technologies they need for 1997.
"To push the revenue envelope, marketing, the sales channel
and the sales pitch will make the difference," said David
Goodtree, an industry analyst at Forrester Research Inc.
"The main places you will see it are in advertising and
packaging of services," said Bill Bain, a consultant at Mercer
Management Consulting.
NEW WAYS TO REACH CUSTOMERS, NEW PACKAGES OF SERVICES
The companies are aware that customer turnover, or churn,
is their mortal enemy in marketplace combat. Some ways of
selling keep customers better than others, even if they cost
more in the short run.
Some ideas were launched in 1996. AT&T Corp. and
Sprint Corp. have shown the shape of things to come
with moves into multilevel marketing and retail link-ups,
respectively.
WorldCom Inc. has shown a new way of packaging
services by acquisition, and merger partners MCI Communications
Corp. and British Telecommunications Plc () have
shown that the relevant markets are now international, not
national.
BILLING AND INTERNET ARE ONLY VITAL TECHNOLOGY ISSUES
Only in billing and speed of Internet delivery is
technology going to make much difference, because these enable
companies to make their services look different.
Unified billing is vital for offering a package of services
which can be paid for by one check. MCI has it, a crucial
advantage over AT&T, whose own billing system is supposed to be
ready in 1997.
Analysts say a telephone company or cable TV firm that can
offer high-speed Internet access as one facet of its services
will bring thousands of customers' long-distance, wireless and
local telephone business across, too.
Most people now see the Internet as the information
superhighway, and the fight is over the on-ramps, whether it be
telephone technologies like integrated services digital network
(ISDN) and asymmetric digital subscriber loop (ADSL) or cable
modems using coaxial TV cable.
HUGE BOOST FOR ADVERTISING AGENCIES, NEWSPAPERS
As the regional Bells enter long distance in earnest and
and long-distance companies offer patches of local service, the
advertising war will rise to a pitch rarely seen -- good news
for advertising agencies, newspapers and TV stations.
The same will be true in wireless, where big cities will
see five personal communications services and digital cellular
carriers fighting with roughly equal technological offerings
where just two cellular competitors now fight, analysts say.
ALTERNATIVE SALES CHANNELS EXPLORED
Analysts expect to see more of the alternative routes to
the customer. AT&T's alliance with Shaklee Corp., part of
Yamanouchi Pharmaceutical Co. Ltd., is aimed at face-to-face
sales visits to cement and expand its consumer market share.
The idea builds on the success against AT&T that Excel
Communications Inc. has had with the approach.
Sprint's store-within-a-store at Tandy Corp. show a
low-capital way to interest consumers, analysts say.
"AT&T spent money building the phone center stores and
realized they can't make money in bricks and mortar, but Sprint
said 'Let others pay for that,'" said Forrester's Goodtree.
NETWORK QUESTION - RENT VS. BUY?
Marketing is also prompting a second look at the
rent-or-buy decision for high-tech communications networks.
"Owning the network is critical to the cost position and
speed-to-market position," said Goodtree.
There is also an intense debate among analysts about where,
if anywhere, shortages in long-distance network capacity can be
expected in the next year. If so, takeover activity could be
drawn by those with underused networks.
On one side stand those who see a huge explosion in
Internet, data and capacity-hungry video traffic, while on the
other stand those who see several new networks already under
construction and ever more techniques to compress data.
"At first, it always makes sense to resell capacity. Then,
when you pass a certain benchmark, it makes sense to own
networks," said Bette Massick of brokers Bear Stearns.
AMBITIOUS BROADBAND IDEAS SCALED BACK IN 1996
Many ideas have foundered in 1996. The regional Bells'
plans to build dedicated broadband networks for television have
been shelved for now, and in the last few months even plans to
use wireless cable have been rethought.
Wireless cable, in which signals are beamed by line of
sight to a receiver on the side of a home, has experience
technical problems in some areas.
More importantly, analysts say, the threat from cable TV
companies to enter the telephone market has been much slower to
materialize than expected.
The idea of owning futuristic content has burned those who
tried it. MCI's venture with News Corp. Ltd. has been
put on a back burner, partly because of the British Telecom
merger.
The TeleTV venture of Bell Atlantic Corp. , NYNEX
Corp. and Pacific Telesis Group , which has
cost hundreds of millions of dollars so far, is likely to be
closed or folded inside Bell Atlantic, according to newspaper
reports.
Ray |
