AT&T Corp. took another giant step into wireless competition with the confidence of an experienced player holding a royal flush-primed with a fat distribution channel, a database brimming with customer contacts and the ability to dominate the market from which it has been banned for a dozen years.
AT&T announced plans to begin offering cellular and paging discounts to long-distance customers in some markets beginning Sept. 18.
“We’re just playing our first card,” said Alex Mandl, AT&T executive vice president and chief executive officer of the company’s Communications Services Group, its long-distance arm. “We’ve just begun to demonstrate the promise and potential of a combined McCaw-AT&T. I think it’s fair to say that nobody can match the depth and breadth of our resources,” Mandl said.
The campaign will offer a $1, “ready-to-go” AT&T 3810 12-ounce analog cellular phone and the first 30 minutes of airtime for a $29.99 monthly fee in many markets. People who choose AT&T for their cellular and home-long distance service can receive a 25 percent discount on all AT&T cellular long-distance calls, “pending tariff effectiveness.” Consumers can receive some free evening and weekend airtime for three months.
Businesses can receive either an AT&T 3810 cellular analog phone or an AT&T 6650 digital phone with a travel pack including battery saver, spare battery and charger. Businesses that choose AT&T long distance are eligible for discounts of up to 39 percent and sub-minute billing on their AT&T cellular long-distance calls.
AT&T Corp.’s plan to offer cellular and paging discounts to its long-distance customers gives the company’s long-distance sales group two more products with which to drive sales, said a wireless analyst.
“I think this will enhance their long-distance revenues. Cellular and long distance are complimentary services because the cellular customer needs a long-distance provider too,” said Jon Hulak, a senior analyst for BIS Strategic Decisions Inc.
While other personal communications service providers are just starting up, AT&T already has many of the critical cogs of its marketing machine in place, said Mirva Anttila, wireless analyst for Northern Business Information in New York. “They have an intense national distribution network, a brand name familiar to American customers and AT&T phone centers everywhere. This is a natural strategy for them,” Anttila said.
AT&T’s divisions have begun to work more cohesively, Hulak said. “They know who all their customers are and their calling patterns. If you use a calling card, it tells them you are traveling. There is data in parallel AT&T computers across the country, with details sitting dormant. They can use database mining technology and take advantage of all that information.”
AT&T claims 90 million customers-not counting the 2 million wireless subscribers it acquired when it purchased McCaw Cellular Communications Inc. in 1994. The potential of reaching 92 million people may ignite regional Bell operating companies to push for quicker deregulation to get into the long-distance business, Hulak said.
As part of its paging strategy, AT&T customers in some markets this month can receive a local numeric pager and a free first month of service for a monthly lease of $12.95. Consumers will receive unlimited local messages and pager activation fees will be waived. Businesses will receive 200 free messages each month, with additional messages 15 cents each.
The AT&T-McCaw merger was federally approved with some restrictions, most of which are on AT&T’s cellular arm. This campaign is offered by AT&T long-distance service. “The long-distance component of cellular long distance will be treated as a single account,” Mandl said.
AT&T also is restricted from using the AT&T brand in nationwide advertising until 60 percent of McCaw’s cellular customers have been “balloted,” or have been allowed to make a new choice of long-distance carrier. AT&T expects to finish 50 to 60 percent of balloting by Aug. 28.
Markets slated for the initial joint marketing endeavor include Boise, Idaho, Denver, Jacksonville, Fla., Las Vegas, Miami, Minneapolis and St. Paul, Minn., New York, Orlando, Fla., Pittsburgh, Portland, Ore., Sacramento, Calif., Salt Lake City, Seattle and Tampa, Fla.
AT&T expects to launch the plan in Dallas-Fort Worth, Little Rock, Ark., Tulsa and Oklahoma City, Okla., San Antonio, Shreveport, La., and in Alaska by the end of the year.
