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MCI Communications

MCI Communications is the second largest longdistance carrier in the United States (behind AT&T), and offers long-distance phone service both domestically and internationally. Its primary business is direct dial voice transmission; the company also offers toll-free 800 service, operator assistance, worldwide direct dialing, facsimile transmission, and 900 (pay) service. The company competes in a highly competitive market, but has good financial resources, and has proven successful at introducing synergistic products to augment its offerings. by continuing to expand into the international market, and by improving its domestic products, the company should be able to continue to compete successful in this industry.

Microwave Communications, Incorporated was begun in 1968 and used microwave radio technology to provide communication between interstate truckers. At the time, American Telephone and Telegraph (AT&T) was the only provider of local and long-distance telephone service in the country. AT&T had laid thousands of miles of copper cable in order to connect its customers throughout the United States, at considerable expense. In addition to securing rights of way and constructing the trenches for the cables, AT&T also had to purchase the cable itself at a time when copper was relatively expensive. Because of this, entry into the market was difficult, and AT&T, which established the first telecommunications network, became the only phone company.

During this time, the price structure was built around an average cost strategy. Prices were calculated so that consumers in heavily populated areas, where phone service was less expensive, paid more than the actual cost of their service to subsidize customers in rural areas. Similarly, the high fixed costs of providing local service were offset by the revenues generated by the long-distance market. Thus the pricing structure of the industry was not based on the actual cost of t...

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MCI Communications. (1969, December 31). In LotsofEssays.com. Retrieved 03:34, March 29, 2024, from https://www.lotsofessays.com/viewpaper/1694056.html