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Technology Stocks : America On-Line (AOL) -- Ignore unavailable to you. Want to Upgrade?

To: Boplicity who wrote (6055)	3/3/1999 12:44:00 AM
From: puborectalis	Respond to of 41369

AT&T may tap AOL to sell long-distance BY STEVE ROSENBUSH USA Today NEW YORK -- AT&T and America Online are holding serious talks that could lead to a marketing alliance, people close to the discussions say. The deal apparently would allow AT&T to sell its long-distance phone service via AOL's market-leading on-line service, which has 15 million subscribers. Consumers could sign up for AT&T phone service and pay their AT&T bills on AOL. The talks underscore how the Internet is changing the sales, pricing, billing and fundamental economics of long-distance telecommunications. The Yankee Group says 1.6 million households already pay their long-distance phone bills on line, and their ranks will hit 10.8 million by 2003. On-line billing and sales cut costs for carriers and create lower prices at the retail level. An agreement probably couldn't take effect until July 2000. Tel-Save.com has exclusive rights to market long-distance phone service on AOL through June 2000. AT&T declined comment on the matter. A deal could be announced well before then, although it's also possible the talks could collapse over a disagreement about price. Cash-hungry AOL is said to be looking for an upfront payment of about $500 million, which would fund network construction. AOL is talking to other long-distance carriers, but AT&T appears most serious. Sprint has had very preliminary talks with AOL. MCI WorldCom is interested in marketing on AOL, but the price might be too steep. Tel-Save, which sells long-distance service over AOL for 9 cents a minute, has sold long-distance subscriptions for 1.5 million phone lines. The company announced a renegotiated deal with AOL on Jan. 5, making it clear that the exclusive nature of their relationship would expire. AOL spokeswoman Ann Brackbill declined to confirm or deny the existence of any specific negotiations. AOL would lose a series of guaranteed payments if it canceled the exclusive aspect of its agreement with Tel-Save, says Ed Meyercord, executive vice president for corporate development at Tel-Save. Tel-Save would also be free to market its long-distance services through competitors of AOL. It's too early to say how a change in the relationship between AOL and Tel-Save would affect Tel-Save customers, Meyercord says.