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Technology Stocks : IDT *(idtc) following this new issue?* -- Ignore unavailable to you. Want to Upgrade?

To: Frank A. Coluccio who wrote (1150)	10/18/1998 9:49:00 AM
From: HVN	Read Replies (2) \| Respond to of 30916

My response: 1. With the history lesson you gave me, I guess you've been at this for a while! :) however, my point is that even if the Bells spent tons of cash fighting the CLECs in court, they haven't/didn't plan properly for the eventuality that in the long run, they'd have to give in or the attackers would find other ways in - like ATT is doing with the Teleport and TCI acquisitions. 2. About ATT pushing their lower margin customers to some other service - actually, that's something I'd advised them to do in a prior life as a management consultant. However, it wasn't to move to some lower quality service (in fact, VOIP is today no different than circuit switched in terms of quality). The idea is to move these customers to lower cost management. For example, take a customer spending $5/month - it makes little sense sending them a $100 check to switch to AT&T. And at the same time, spend $1-2/month sending them bills. That kills the margins - actually, it's unprofitable. So, if you can make the management costs of these customers as low as possible, (like web billing, signing up through the web, etc.) the reasons to hold on to them increase. Of course, all this also holds for your higher value customers - however, with higher value customers, one can expect them to want higher levels of customer service since they use your service to a greater extent. For this higher level of service, you need good customer care reps - and that's something AT&T is better than its competitiors at doing. And in this age of labor shortage, this IS a critical issue. 3. Finally, I'll still hold on to my earlier point about the 'new markets' point - in most cases, it's new players going after the same pie - at least domestically. For example, how much more local calling can a customer do? Local calling has penetrated over 95% of US households. So, alls an attacker can do is grab an existing customer for an established market from an incumbant. That does not mean that the local calling business isn't growing - but it's growing more in 2nd line usage for fax/internet access. The same logic for the other telecom service - most of the market is already owned by someone. It's a matter of providing customers with the best bundled or unbundled options - depending on their profile. If you're looking for new markets - the only big ones I can think of in this industry are broadband internet and entertainment services, VPNs and international markets.