In the $29 billion-a-year market for long-distance phone service, $50 seems small. Maybe that's why AT&T can offer some customers of MCI and Sprint $50 to switch back to AT&T.
Not 50 cents, not $5, but $50 -- enough to buy groceries for a family of four for half a week, or 200 diapers, or 45 gallons of gasoline, enough to drive round trip between Baltimore and Battle Creek, Mich.
"This is unheard of," said Ann Brewer, vice president for residential marketing for Sprint.
In various markets nationwide, AT&T mails to longtime Sprint or MCI customers a bright yellow envelope that reads in bold black letters, "We really meant it when we said your check was in the mail." In the envelope is a $50 check; when it clears, AT&T is authorized to switch the customer from MCI, Sprint or other long-distance carrier.
Like MCI, AT&T has also sent out checks for $10 and $20, while Sprint has experimented with $25 amounts. But no company has AT&T's deep pockets to finance such a mailing, which has been sent out in the Midwest.
William N. Deatherage, an analyst at S.G. Warburg Securities, estimates that AT&T spent $2.62 billion on long-distance marketing in 1991, up 55 percent since 1988. That was mainly for television and print advertising.
But if it chose to, AT&T has a big enough marketing budget to give $50 to more than half of America, or about 52 million households. That would probably be enough to convert every MCI and Sprint customer and reinforce not a few wobbly AT&T customers to boot.
AT&T is close-mouthed about the $50 giveaway, saying only that it tests many promotions. "It's not something we're going to offer to everyone," a spokeswoman said. "But we continue to be interested in the response rate to this promotion."
MCI says AT&T's $50 giveaway indicates desperation in the face of MCI's successful Friends and Family promotion, where MCI customers get 20 percent discounts in return for soliciting friends and relatives to join MCI.