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Technology Stocks : MGC Communications, Inc. (MGCX)
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To: Hubert Few who wrote (3)1/16/1999 3:17:00 PM
From: Kenny Low   of 61
 
Hebert, as a independent representative of MGC I can only tell you one side of the service and a little about how they work.

I was at the meeting last month in Los Angeles where the first customer in the southern California area was signed up. A lot of hoopla and picture taking, but they did explain how the game is played.

The problem with competing against the big boys such as GTE and PAC-Bell is not in the deregulation, but in how difficult it is to make money. I'll try to explain. As the case with PAC-Bell, MGC must lease the wire that connects the customer's phone with MGC's switches. PAC-Bell charges their customers $10 a month, GTE $15.50. MGC must pay $18 to PAC-Bell for those same lines. So you see how difficult it is to compete when you "lose" up to $8 per line.
How does MGC make money? The only way to do it is by selling the 'extra' features such as call waiting and call forwarding in a package which will sell for less each month than what the comparable PAC-Bell package.

MGC thinks they can make it go, and is spending millions on the switches that go into distribution centers. Each day more and more local exchanges are added.

As to the quality of service, since Las Vegas has been using MGC for a while, you probably need to find someone in that area who could tell you better than I. If the quality of the switches and the type of training that those who work in customer service is any indication, they should be tops.

Hope this helps,

-Ken-
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