Deutsche Telekom, phone home; alien concept of competition gets a giant's dander up
Article Abstract:
Since the European Union ordered deregulation of the telecommunications industry and the fostering of competition, former German monopoly Deutsche Telekom has lost 30% of its long distance business, much of it to Mobilcom, a long-distance carrier started by Gerhard Schmid. Prices for calls have dropped by as much as two thirds.The example of Germany is the most extreme in the Union, since prices there were highest and the government-mandated change in the industry was the most far-reaching. Mr. Schmid's strategy emulated that of World.com in the United States. Instead of investing in infrastructure, Mobilcom leased access to the network at the favorable prices mandated by the government. While other carriers continued to charge high prices, Mobilcom went in short order to the lowest pricing structure it could mount, snatching away 10% of Deutsche Telekom's business in its first year of operation. Investors reacted by driving up Mobilcom's share price. Currently, Mobilcom has 10% of total long-distance volume. The company is valued near $4 billion. Deregulation has also unleashed speculation in the share price of other telecoms, including Deutsche Telekom. Internet service promises to be the next arena of competition in Germany's deregulated market.
Publication Name: The New York Times
Subject: Business, general
ISSN: 0362-4331
Year: 1999
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New bill lets Bells offer long distance; passage likely today by Senate committee
Article Abstract:
The Senate Commerce Committee is expected to pass a comprehensive communications bill making it easier for the seven regional Bell companies to offer long-distance telephone services. The bill's ultimate future is suspect as Republicans sponsoring the legislation have thus far failed to reach an agreement with Democrats or satisfy long-distance carriers, such as AT&T, Sprint and MCI. The measure is stalled by the same industry feuding and partisan politics that halted earlier legislation. The Dept of Justice may give Ameritech Corp, a Chicago-based baby Bell, the green light to offer long-distance services on an experimental basis. Ameritech has agreed to open its own network to competition in exchange for providing Chicago-area customers with long-distance services.
Publication Name: The New York Times
Subject: Business, general
ISSN: 0362-4331
Year: 1995
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