WorldCom will raise calling rates of MCI unit

Long-distance provider tries to halt revenue slide

January 03, 2003|By BLOOMBERG NEWS

CLINTON, Miss. - World- Com Inc., the second-biggest U.S. long-distance telephone provider, is raising calling rates at its MCI residential unit for the third time in three months to stem a slide in revenue.

Starting Feb. 1, the state-to-state rate on four plans including MCI Anytime Advantage will rise to 9 cents a minute from 7 cents, according to WorldCom's Internet site. The rate for another plan will increase to 9 cents from 8 cents. The company, which filed for the largest U.S. bankruptcy in July, has about 18 million residential phone customers.

WorldCom and other U.S. long-distance providers, including No. 1 AT&T Corp. and No. 3 Sprint Corp., are raising prices after years of declines brought them below 5 cents a minute in some cases.

The companies' sales have fallen as customers increasingly use e-mail and mobile phones. The last time WorldCom issued comparable results, it reported a 7.8 percent drop in first-quarter 2002 sales.

"We continually evaluate our products and services, and make adjustments to them based on trends in the marketplace," said Claire Hassett, a spokeswoman for the company.

WorldCom plans to restate results after acknowledging $9 billion in accounting errors dating to 1999. The company, which reports its results monthly to the bankruptcy court, posted a $205 million loss from continuing operations in October, compared with $108 million in September. Sales were little changed at $2.3 billion.

AT&T raised prices for some customers Jan. 1, including new residential subscribers to a 7-cents-a-minute plan, who will pay a monthly fee of $4.95, $1 more than before. Rates for services such as operator-assisted calls also will rise in AT&T's first major increase in a year.

WorldCom's shares rose 4 cents to close at about 18 cents yesterday in over-the-counter trading. They traded as high as $62 in June 1999.

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