Prompted by escalating complaints over huge phone bills facing families of troops in the Persian Gulf, American Telephone & Telegraph on Thursday slashed its international rates from Saudi Arabia by as much 28%.
The move came less than a week after the Federal Communications Commission and a powerful congressman contacted the phone company about severe financial problems encountered by some military families because of long-distance charges from Saudi Arabia. The move also follows a less dramatic rate cut last week by AT&T;'s bitter long-distance rival, MCI Telecommunications.
AT&T;'s new rates, effective today, are the lowest between Saudi Arabia and the United States offered the three carriers serving the Gulf region. MCI and Military Communications Corp., the other carriers with portable phones near the battlefields, said they did not plan to follow AT&T;'s lead immediately.
Under AT&T;'s new rates, a 10-minute call--using the least-expensive program available--will cost $11.50. Similar calls using MCI's lowest-available rates will be $13.90 and using MCC's network $19.29.
The phone bill problems facing thousands of military families are the direct result of the unprecedented availability of nearly 2,000 telephones within an easy drive of the Persian Gulf battle lines. The phones, which employ advanced satellite-relay technology, were installed in the Saudi desert to help boost troop morale. Telecommunications officials say they are carrying more than 32,000 calls per day to the United States.
However, the recent arrival of huge bills for many of those calls has brought financial hardship to many families and has prompted U.S. authorities to question the international rates charged by the carriers.
AT&T; said that although the average monthly bill for Persian Gulf calls is about $50, it noted that thousands of customers have bills greater than $400. In some cases, including that of a Simi Valley secretary whose husband left for Saudi Arabia days before the birth of their son, the bills exceed $2,000.
Within the past several weeks, stories of severe problems and phone disconnections have circulated throughout the nation, prompting calls for aid for military families.
FCC Chairman Alfred C. Sikes and Rep. John D. Dingell (D-Mich.), chairman of the House Energy and Commerce Committee, last week told U.S. long-distance carriers to push Saudi telecommunications authorities to reduce the access fees they add on to every international call.
MCI and AT&T; officials said this week that they are actively pursuing such a reduction and that they remain confident the Saudi government will comply. MCI said it would pass along any access fee reduction in the form of a lower rate.
AT&T; said that because its new rate plan would initially result in a $3-million-per-month loss on phone service to Saudi Arabia, it would use any access fee cut to offset its losses.
In addition to cutting their rates to Saudi Arabia, AT&T; and MCI announced toll-free 800 telephone lines for military families with questions about their bills from the Gulf. The AT&T; number is (800) 323-4357; MCI's is (800) 727-5435.
PHONE RATES FROM THE FRONT
First additional set-up minute minutes charges AT&T; Calling Card $1.15 $1.15 -- AT&T; "USA Direct" 1.15 1.15 $3.25 MCI Battlefield calls 2.99 .99 2.00/5.00* MCI "Call USA" 3.03 1.09 2.00/5.00* Military Communications Corp. 3.19 1.15 5.75
*$2 charge is for those using MCI's calling card; $5 charge is for collect calls.
Sources: AT&T;, MCI, MCC