Bowing to competition, Deutsche Telekom will cut prices
Article Abstract:
Deutsche Telekom announced long-distance telephone price reductions of up to 63% as of Nov 12, 1998. The move, whose depth surprised analysts, signals the growing competition within the European telephone industry. Deutsche Telekom's long-distance business has eroded by as much as 25% since Jan 1998, when the former German telephone monopoly allowed competition. The overwhelming number of beneficiary companies are small resellers, as especially tough German regulators have forced Deutsche Telekom to provide network access to rivals at reasonable rates. Most West European governments began deregulating their telephone markets in Jan 1998. Deutsche Telekom has compounded its problems by failing to lower its prices in a timely fashion, according to analysts. CEO Ron Sommer blamed hostile German regulations for many of its financial problems, which include flat revenue since summer 1998.
Publication Name: The New York Times
Subject: Business, general
ISSN: 0362-4331
Year: 1998
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F.C.C., as expected, alters rules between phone companies
Article Abstract:
Telephone companies are protesting the FCC's ordering of a nearly $1 billion price cut in the fees they charge companies, such as MCI and AT&T, to connect with local customers. Opponents say there is no guarantee any of the savings will be passed on to customers. Long-distance companies, which have long complained of the billions of dollars paid out to regional Bell companies and independent providers, such as GTE, stand to benefit the most. While most analysts are unsure of the savings to long-distance carriers, some predict the savings will probably turn up as corporate profit before any of it is passed on to customers in the form of lower rates. Mark Vogel, a telecommunications analyst at NatWest Securities, says the problem with the plan is that it is up to long-distance carriers to decide whether to lower calling rates to get more customers or merely add the funds to profit.
Publication Name: The New York Times
Subject: Business, general
ISSN: 0362-4331
Year: 1995
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