AT&T sets flat-rate wireless price plan --'''':>
By Jessica Hall
NEW YORK, May 7 (Reuters) - AT&T Corp. (T - news) on Thursday
launched a national one-rate pricing plan for its wireless phone service, a move expected to fend off increasing competition and boost subscribers and revenues.
The simplified pricing plan, called AT&T Digital One Rate, challenges
other wireless calling plans that charge monthly access fees, separate
long-distance charges for inbound and outbound calls outside the local
calling area, and roaming charges when customers travel outside of
their home area.
''It's a user-friendly, cheap service that addresses the cost fears of
many customers ... It's the begining of the shift from wireline (phone
use) to wireless,'' said Jeffrey Kagan of consultancy Kagan Telecom
Associates.
AT&T said the flat-rate service had three pricing options: 600 minutes
of monthly air time for $89.99; 1,000 minutes for $119.99; and 1,400
minutes for $149.99. It said additional minutes would cost 25 cents
per minute.
Current wireless pricing plans will continue to exist, the New
York-based company said.
''AT&T's new pricing plan is a logical strategic move because of the
increasing competitive pressures in wireless,'' said Frederick Moran,
a telecommunications analyst with Furman Selz. This is more of a
competitive response than a proactive response. It will help them
reinvigorate themselves.''
AT&T and other wireless carriers have been facing increasing
competition from companies such as Nextel Communications Inc.
(NXTL-news), Sprint PCS (FON - news) and new entrants, analysts said.
AT&T Wireless' subscriber growth has slowed. It added about 195,000
wireless subscribers in the first quarter, down 23 percent from the
first quarter a year ago, and lower than Nextel's current
first-quarter net digital subscriber additions of 371,000.
AT&T expects the pricing plan to boost revenues, said Dan Hesse, head
it AT&T's wireless unit.
''Clearly, it's going to have impact,'' Hesse, president of AT&T
Wireless, said in a telephone conference call with reporters. ''We
expect to increase revenues substantially.''
He said the wireless unit alone should record ''double-digit'' growth
in 1998 revenues, up from $4.3 billion in 1997. He declined to be more
specific.
AT&T said its Digital One-Rate service required use of a digital
multi-network phone, the latest generation of so-called digital PCS
phones that work nationwide on AT&T's wireless services network as
well as on the digital and analog networks of other wireless carriers.
AT&T has an exclusive agreement with Nokia (NOKSa.HE), the Finnish
telecommunications equipment company, giving AT&T exclusive
distribution rights to the Nokia 6162 digital multi-network phone for
one year.
The phones, to sell for between $199 and $229, weigh less than 6
ounces each and have a standard extended-life battery with up to 200
hours (or eight days) of standby time, AT&T said.
Shares of AT&T slipped $1.69 to $57.875 in consolidated New York
Stock Exchange trading amid weakness in the broader market.
|
