AT&T Loses 5.3 Points of Market Share as 26 Mln Homes Switch
Bloomberg News
October 13, 1998, 4:44 p.m. ET
AT&T Loses 5.3 Points of Market Share as 26 Mln Homes Switch
New York, Oct. 13 (Bloomberg) -- AT&T lost 5.3 percentage
points of the $70 billion-a-year long-distance market as more
than 26 million U.S. homes switched services this year, 2 million
more than last year, the Yankee Group said.
The shifts benefited smaller carriers like Excel
Communications Inc., GTE Corp., and Qwest Communications
International Inc., said Yankee Group, a Boston-based consulting
firm that analyzes telecommunication markets. Companies other
than the ''Big Three'' of AT&T, MCI WorldCom and Sprint now
account for more than 20 percent of the market, it said.
New York-based AT&T was the long-distance carrier for 62.2
percent of the 2,000 homes that participated in the survey, which
was completed earlier this week. MCI WorldCom was second with
12.3 percent, and Sprint came in third with 5.1 percent.
''The company has 16 million customers that spend less than
$3 a month in long distance calls,'' said Brian Adamik, Yankee's
senior vice president, and AT&T is trying to shed such customers.
''To make them more profitable, it charges them a $3 fee, which a
lot of customers are not pleased to pay and prefer to switch to
other carriers,'' he said.
''AT&T made a decision of retaining valuable customers who
have larger bills with us (rather) than the ones leaving. We've
been successful in doing that,'' said Mark Siegel, an AT&T
spokesman. He said it's hard for a company with 70 million
customers to draw general conclusions from a survey of only 2,000
people.
Excel Communications, GTE, and Qwest/LCI benefited both from
AT&T's decision to cast off less-profitable accounts and from
their own aggressive marketing efforts, the Yankee Group said.
These efforts include television, print, direct mail and Internet
advertising, and direct calls in which the companies offer lower
fees to customers.
AT&T's shares rose 1/4 to 58 7/8.
--Karina Paladin in the New York newsroom (212) 312-2300 /rw |
