2/99 Frost report. AT&T Personal Network Plan - A First in the Industry Plus a Lot More...
frost.com
By Isabelle Gallo
On Sunday, January 31, 1999, AT&T introduced its new flat rate pricing plan that will offer a
single flat rate for both wireless and wireline calling. AT&T Personal Network combines long
distance and wireless services on a single bill, voicemail with text messaging and caller ID at no
additional cost, a personal toll-free number for incoming calls, calling card for use when traveling,
and a single number for customer care. The plan requires a one year contract with a base monthly
fee of $29.99 and offers a flat rate plan of 10 cents-a-minute for wireless and long distance calls.
This pricing plan is unique as it actually combines wireline long distance service and wireless
services, as well as calling card and toll-free services. Other carriers' bundled services often are
just a package of various pricing plans under a single bill, and customers choose the most
appropriate pricing plan among the available options. For instance, ALLTEL's 360
Communications offers its Bundled Value Packs that combine wireless and long distance services,
but the rates for the two services are different. Therefore, this flat rate pricing plan is distinctively
simple and easy to understand which will be extremely attractive to customers. No other carrier,
including MCI WorldCom and Sprint, offers a uniform flat rate wireless and wireline pricing plan.
AT&T has decided to innovate in the industry and to initiate convergence of the wireline and the
wireless telecommunications services market. One year ago, AT&T shook the wireless market
with its Digital One Rate plan that eliminates roaming charges. At that time, the company was
targeting heavy end-users who are willing to spend $89.99 a month for their wireless
telecommunications needs. This time, AT&T addresses the market needs of the growing mass of
U.S. consumers that rely on multiple communications services to manage their busy schedules.
The simplicity and convenience of this plan will definitely appeal to a large portion of AT&T's
current customers. By offering this low price service plan, AT&T will be able to retain those
customers that might have started to shop around and are looking at other options. The flat rate of
10 cents is applicable for all calls, including long distance, calling card, and toll-free calls. This plan
will probably also convince other carriers' customers to switch to AT&T's services for wireline or
wireless services. The additional features, such as the voicemail with text messaging and caller ID
at no additional cost, plus the calling card and the toll-free numbers are making this plan an ideal
pricing plan for mobile, busy individuals.
As the telecommunications services market is becoming more and more competitive, AT&T
recognizes the need for strong tactics to retain its current customers as many new carriers are
introducing low priced, competitive pricing plans. Although the company may have declining profit
margins in the short-term, in the long-term, it will reduce its churn rates and marketing costs. Other
competitors will now feel the pressure to introduce their own flat rate pricing plans across their
wireless and wireline services. The price and promotion war will likely become even more intense,
forcing carriers to consolidate and to further cut their operating costs.
February 1999
IRG # 63
AT Code: 733
© 1999 Frost & Sullivan. All Rights Reserved.
E-mail newsletters@frost.com to discuss this article or other research issues.
Related Upcoming Reports
2726-63: U.S. Bundling Services Market
2006-63: U.S. Telecommunications Billing Solutions Provider Market
2682-63: U.S. Wireless Telecommunications Services Market
2723-63: U.S. Long Distance Telecommunications Services Market
Related Past Reports
2716-63: U.S. Bundling Services Market
|
