Carriers Plan Toll-Free Global Calls

By JUBE SHIVER Jr. and KAREN KAPLAN

Feb. 7, 1997 12 AM PT

SPECIAL TO THE TIMES

WASHINGTON —

Many of the world’s largest telephone carriers will launch a new system of global toll-free numbers this spring that could transform the way Californians and other Americans travel and conduct business around the world.

The new telephone numbers--which sport an “800” prefix like the 3-decade-old version in the United States and Canada but with eight digits that follow--are intended to provide toll-free calling between countries rather than within a country.

Because of their international reach and the potential for lowering phone costs and facilitating a unified marketing approach around the world, experts predict that the new numbers will have a profound effect on business--especially in Southern California, which is a huge travel and international business hub.

“This will be felt in almost every segment of the Southern California economy,” said Jack Kyser, chief economist for the Economic Development Corp. of Los Angeles County. “It probably makes more of an impact in Los Angeles because we are . . . a major international business city.”

He predicts that companies ranging from toy manufacturers to auto design studios would benefit from the reduced rates that international toll-free calls could produce. Other sectors that stand to benefit include international business, tourism, engineering, entertainment, real estate, fresh produce and even local universities.

Recognizing that potential, more than 15,000 U.S. companies have applied for the new numbers in recent weeks, even though they have not been widely publicized by the long-distance carriers taking applications, such as AT&T;, MCI, Sprint, WorldCom and USA Global Link, nor by the International Telecommunications Union in Geneva, which is administering the system.

When launched in late March or early April, callers will be able to use the numbers in the United States, Australia, Canada, Hong Kong and 10 European countries. Japan and Singapore are expected to sign later in the spring, and some developing nations are interested as well. Although several countries besides the U.S. and Canada offer toll-free dialing within their borders, there is no uniform, worldwide dialing protocol for making toll-free calls across borders.

With the new system, a traveler in the U.S. seeking hotel reservations in France, for example, would dial the U.S. international dialing code, 011, then 800 and an eight-digit number. A caller in Australia could use that same 800 number.

Toll-free dialing was introduced in the U.S. in 1967, but only in the last decade did millions of small- and medium-sized businesses begin to sign up, recognizing the marketing potential that larger companies were already taking advantage of.

By last year, with the supply of the nation’s 7.6 million possible toll-free numbers nearly exhausted, the telephone industry issued a new 888 prefix to accommodate the skyrocketing demand.

Some experts believe that the new numbers, an idea hatched by multinational corporations and long-distance carriers, could increase pressure to reduce high international dialing rates maintained by state-owned monopoly phone carriers in foreign countries. That’s because the big corporations footing the bill for these calls will be in a far stronger position than individual dialers to negotiate volume discounts with each national carrier, said Frederick Voit, a telecommunications analyst with the Yankee Group in Cambridge, Mass.

Companies could also use the numbers to route international calls over cheaper networks. For example, MCI and British Telecom, which are in the process of combining their telephone operations, say they plan to aggressively cut prices for calls between the U.S. and Britain. So a company might save money by routing certain calls from Europe over such lower-cost international links.

“I should think that this system will have perhaps an even bigger impact than the [U.S. system] in the sense that this is a way to bypass the high international charges” of collect calls, added Dimitri Ypsilanti, head of the telecommunications section of the Organization for Economic Cooperation and Development in Paris.

The hospitality industry has been particularly interested in providing an easier and more cost-effective way to be accessible to traveling customers.

For instance, American Express, which allows its traveling customers to call collect to report stolen or lost credit cards or travelers’ checks, says it will save a significant amount of money on collect calls, depending on the final rate set for the new toll-free service.

Global toll-free phone numbers would boost commerce with Europe, Japan and other parts of the world where phones are commonly used to conduct business. Although California is known for its ties to Central and South America, the fact that there are fewer phones per capita there means the new numbers may not have much of an immediate impact on trade within the hemisphere.

But for California, overseas marketing potential is especially good.

Companies could advertise their global toll-free numbers on World Wide Web sites, which are accessed by Internet users around the world, said Regina Costa, telecommunications research director for TURN, or the Utility Reform Network, in San Francisco. California firms were among the earliest adopters of Web sites for online commerce, and the new numbers would increase their usefulness, she said.

But obstacles remain. Variances in language and phone systems may make it tough for U.S. firms to capitalize on the numbers as they have in their domestic marketing.

For instance, the 12-button alpha-numeric keypad common in the U.S. is not widely used in some countries, where rotary telephone dials with no letters still predominate. As a result, vanity toll-free numbers like (800) COLLECT or (800) FLOWERS may not easily be recalled.

Nevertheless, some of the biggest proponents of vanity numbers are reserving them en masse.

“We’ve applied for a good number of vanity and [special] numerical combinations,” said Chris McCann, vice president of 1-0-FLOWERS Inc., an international online flower service. “We have to do that to protect our trademark. But we also look at [global toll-free numbers] as the dawn of a new era.”

Times staff writer Shiver reported from Washington and special correspondent Kaplan from Los Angeles.

(BEGIN TEXT OF INFOBOX / INFOGRAPHIC)

Toll-Free Nations

The 14 countries set to provide international toll-free dialing this spring:

Australia

Belgium

Britain

Canada

Denmark

Finland

France

Hong Kong