MCI matches Sprint's calls in evening at 5 cents a minute

No. 2 long-distance company's shares fall in heavy trading

August 10, 1999|By BLOOMBERG NEWS

CLINTON, Miss. -- MCI WorldCom Inc., the No. 2 U.S. long-distance telephone company, said yesterday that it will offer evening calls for 5 cents a minute, copying a move by rival Sprint Corp. three weeks ago.

Shares of MCI WorldCom, based in Clinton, Miss., fell $3.8125 to a six-month low of $77.4375 in trading of 33.1 million shares yesterday, making it the most active U.S. stock.

The drop is a signal that investors may be worried that the latest price cuts will hurt the company's earnings, although MCI said it could slash prices because the U.S. Federal Communications Commission recently lowered access charges, the fees that long-distance companies pay local phone companies to connect and end their calls.

"We clearly don't make pricing changes to subtract from profits," said WorldCom Senior Vice President of Consumer Marketing John Donoghue.

AT&T Corp., the No. 1 long-distance carrier in the United States, would not say whether it would match MCI WorldCom.

"We think what consumers want is real simplicity," AT&T spokesman Mark Siegel said. "They want a rate that they can understand all the time."

AT&T offers One Rate Plus, Siegel said, which gives consumers 10 cent-a-minute long-distance 24 hours a day for a $4.95 monthly fee.

"MCI is challenging AT&T to duke it out with them once again," said Brian Adamik, an analyst at market researcher Yankee Group, adding, "AT&T will replicate the offer, but continue to push Personal Network as the lead."

AT&T's Personal Network gives consumers long-distance, calling-card and local wireless calls for 10 cents a minute, plus discounted Internet access, for a $29.95 monthly fee.

MCI WorldCom's 5 Cents Everyday plan offers the new rate on residential customers' state-to-state calls from 7 p.m. to 7 a.m. and all day Saturday and Sunday, plus weekday daytime calling for 25 cents per minute, for a monthly fee of $1.95.

Another option, 5 Cents Everyday Plus, offers 5 cent-a-minute calls from 7 p.m. to 7 a.m. and 10 cent-a-minute calls during weekdays for a monthly fee of $4.95.

Pub Date: 8/10/99

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