MCI WorldCom Goes To Five Cents A Minute
Telecommunications services company MCI WorldCom (Nasdaq: WCOM) lowered
its long-distance rates today, cutting off-peak fees to as little as a nickel per minute.
Such a cut symbolizes something consumers stand to appreciate but which will likely
reshape the way telecommunications companies operate: the commoditization of the
industry.
The new offer, given the name "MCI 5 Cents Everyday," offers $0.05 per minute on
residential state-to-state long-distance calls made between 7 p.m. and 7 a.m. and all
day Saturday and Sunday, along with weekday daytime calling for 25 cents per
minute, for a $1.95 monthly fee. MCI had already offered a "5 Cents Sundays" plan
established about two years ago.
Look for MCI WorldCom to ramp up marketing rapidly, particularly in the form of
television commercials featuring Michael Jordan and the Looney Tunes characters.
According to today's issue of The Wall Street Journal, while the nickel fee is not
groundbreaking, the fact that it is available for so much of the week is. Two weeks
ago, Sprint (NYSE: FON) introduced "Nickel Nights," which offers $0.05 per minute
calling every night between 7 p.m. and midnight, for $5.95 a month. Other calls are a
dime per minute.
And market share leader AT&T (NYSE: T) is still primarily in the dime-a-minute
range, although it plans offer the same price all day. Its "One Rate" plan is at that
price point, but it carries a $4.95 monthly fee. Qwest Communications (Nasdaq:
QWST) further muddies the waters with deals offering full-time $0.05-per-minute
calls for $14.95 each month, as well as $0.09 per minute for $4.95. Clearly, shoppers
should be paying attention not just to the per-minute rate, but also to the fine print,
before signing up.
Further price cutting among industry players seems likely. |
