Long-Distance Calls Over MCI Rated as Best Buy : Telephone: Survey by Consumer Action ranks US Sprint as the most expensive, but the differences in cost are small.
MCI offers the least-expensive long-distance telephone service for Californians and US Sprint the most costly, according to a new survey to be released today.
However, rate differences among the Big Three long-distance carriers have rapidly narrowed to the point where there are only minor differences, thanks to price cutting in their escalating battle for new customers, according to the survey by Consumer Action, a San Francisco consumer education group. The survey was based on a sample of 27 long-distance phone calls both within and out of the state.
According to the study, American Telephone & Telegraph was the most aggressive overall price cutter last year, slashing long-distance rates by an average 8.5%. MCI cut its rates 8.1%, while US Sprint trimmed charges just 4.5%. AT&T;’s rate cuts enabled the phone giant to give up its distinction as the most expensive carrier, a position it has held since Consumer Action began its annual survey seven years ago.
Although rates are falling overall, Consumer Action noted one potentially alarming trend for average at-home telephone users: Long-distance rates aimed at business customers are dropping dramatically because of special frequent-caller discount plans, while charges for average residential customers are either flat or rising slightly.
Consumer Action Director Ken McEldowney urged residential users making more than $10 worth of long-distance calls each month to consider joining one of the several new frequent-caller discount plans offered by the carriers.
However, McEldowney cautioned that these plans, most of which charge an extra monthly fee, only offer real value to customers with substantial long-distance calling volumes to offset the extra charge.
“The real irony is that the long-distance companies are actually making money on these discount plans because customers sign up for the wrong plan or fail to make enough calls to cover the special fee,” McEldowney said.
He said consumers should carefully evaluate each of the discount plans offered by the carriers to determine which provides the best features for their individual calling patterns.
In its latest survey, conducted in March, Consumer Action said MCI offered the lowest overall rates for long-distance calling both within California and out of state. In its sample of 27 calls, MCI’s service cost $32.21, while AT&T;’s cost $33.17 and US Sprint charged $33.36.
The biggest difference in charges was for long-distance calls placed within the state. For those 15 sample calls, MCI charged $12.50 while AT&T; levied $12.76 and US Sprint billed $13.80. For the 12 out-of-state calls, US Sprint was the least expensive, costing $19.56. MCI charged $19.63, while AT&T;’s fees were $20.41.
PHONE RATE COMPARISONS Phone rates have become virtually identical amid extensive discounting. Here’s a sample of night/weekend rates for calls from Los Angeles to selected destinations.
Duration of call AT&T; MCI Sprint To Sacramento 2 min., 10 sec. $0.39 $0.38 $0.40 To Chicago 8 min. 1.06 1.02 1.03 To San Salvador* first minute 1.46 1.45 1.46 additional minute 0.64 0.63 0.64 To Hong Kong* first minute 2.17 2.16 2.17 additional minute 0.81 0.80 0.81
*selected economy times
Source: Consumer Action
