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Long Distance Industry & Market

The longdistance telephone industry is an oligopoly with three major participants: AT&T, MCI and Sprint. These companies aggressively compete for market share and revenue in this industry, although AT&T is clearly the largest of the three competitors. The industry has been characterized by a great deal of change during the last ten years, and AT&T recently announced that it was adding to the confusion by breaking its three strategic business units into distinct companies. This research examines the nature of the longdistance market, and the role that AT&T plays in that market.

The telephone is a ubiquitous instrument found in nearly every American home and business. It has transformed the world, effectively making it a smaller place with instant communication available between continents. Local phone service is a given for telephone customers, and residential and business customers have access to longdistance service.

Longdistance service is provided on a pay-as-you-go system with customers paying for each call they make: the more calls (or the more minutes), the greater the charge. However, the various longdistance companies have expanded this concept to include complicated pricing schedules that take into account the time of day, day of week, duration of call, type of call (business or personal) and monthly call volume. Customers can therefore be confused as to which plan actually offers the greatest advantage to them.

While longdistance is important to residences, most longdistance phone calls are made in the business environment, and the major longdistance carriers have sales representatives dedicated to this important market segment. There can be strong incentives for those businesses who are willing to switch longdistance carriers, and the competition to retain market share in this area is intense.

The market is therefore segmented into two distinct groups: business and residential. Much of the pr...

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Long Distance Industry & Market. (1969, December 31). In LotsofEssays.com. Retrieved 18:45, March 28, 2024, from https://www.lotsofessays.com/viewpaper/1695355.html