Local Callers Want To Switch Companies

U.S. households would change their local phone company if given the choice and offered a discount of 10 percent to 15 percent, according to a survey by the Yankee Group.

In addition, if phone companies provided both local and long-distance services, almost 50 percent of U.S. households would select AT&T Corp. as their carrier, according to the Boston-based market research firm. AT&T finished far ahead of any competitors, with no other carrier capturing more than 6 percent share, the report said.

The survey shows the challenge the seven regional Bell operating companies face trying to protect their monopoly in the $90 billion local phone market. It also reflects AT&T’s dominance in consumers’ minds as the No. 1 U.S. long-distance carrier.

“Local phone companies, which have been monopolies, do not necessarily enjoy tremendous loyalty with their existing customer base,” said Brian Adamik, analyst at the Yankee Group. He added the survey also shows “the impact of AT&T’s brand.”

Currently, the Baby Bells face little competition in the local phone market for their business customers and virtually no competition providing local phone services to consumers. That may soon change.

Congress is debating how and when to increase competition among local and long-distance phone companies, and providers of wireless communications. If current proposals are enacted into law, the Bells are expected to face increased competition from AT&T and other long-distance phone companies.

MCI is building local phone networks in numerous cities, while Sprint already provides local as well as long-distance phone services. AT&T is slowly creeping into the local phone market. It provides wireless local phone services via its McCaw Cellular unit.

And a company backed by McCaw founder Craig McCaw is trying to buy a local dial-tone service in Spokane offered by Tel-West Communications Inc.

The Yankee Group report was derived from 1,815 responses to a 44-page questionaire mailed to 2,400 households across the country. The Yankee Group’s survey also revealed that more than 19 million households changed their long-distance company in the past year.