ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Thursday, November 28, 1996 TAG: 9611290118
SECTION: BUSINESS PAGE: B8 EDITION: HOLIDAY
DATELINE: NEW YORK
SOURCE: ASSOCIATED PRESS
AT&T Corp. plans to raise rates 5.9 percent on most consumer calls between states starting Sunday, joining its largest rivals in boosting long-distance prices ahead of the busy holiday calling season.
AT&T said Wednesday that consumers will pay an average of 60 cents a month more as a result of its higher rates on domestic long-distance calls made from home, assisted by an operator or with an AT&T calling card.
The rate increases by AT&T, MCI Communications Corp. and Sprint Corp. do not effect their popular flat-rate plans, which charge the same per-minute price no matter when or where long-distance calls are made.
Analysts said AT&T's increase appeared to be a response to MCI, which last month told the Federal Communications Commission it would raise long-distance consumer rates 4.9 percent Dec. 1. Sprint lifted its rates 2 percent in November for customers not enrolled in a calling plan.
``Usually what happens is when one of them raises rates, they all raise rates. They tend to move in lockstep,'' said Stephanie Babich, a telecommunications analyst with Fitch Investors Service.
An AT&T spokesman denied that the timing was tied to MCI's. The extra money will help pay for AT&T's array of other services and expenses, including the heavily advertised flat-rate plan, said AT&T's Mark Siegel.
AT&T's rate increase, its second this year, comes as long-distance titans seek to draw more revenue from traditional sources to help pay for steep investments in new and growing businesses.
AT&T, MCI, and Sprint are all building high-tech networks to compete in local phone markets, wireless services and other new communications areas.
The popularity of flat-rate calling plans has forced the three to leave these services alone and instead raise prices in other long-distance services, analysts said.
AT&T on Sept. 24 began offering a plan charging 15 cents a minute for calls made to anywhere in the United States, touting it in TV, magazine and newspaper ads. The plan was an attempt to stem customer defections amid stiff competition by flat-rate plans from Sprint and MCI.
Called ``AT&T One Rate,'' the service option has no restrictions and no enrollment fee. But for some customers, it is cheaper to use other AT&T plans.
Babich said the three companies' increases on their basic rate plans appear to be an effort to further spur people ``to get on some kind of calling plan.''
In addition to pushing up basic consumer long-distance rates, AT&T is lifting prices on several older calling plans that are no longer actively marketed by the company.
Monthly fees for AT&T's ``Any Hour'' plan go up to $13.15 from $10.85, for the ``ReachOut'' plan to $10.85 from $10, and for ``Select Saver'' to $2.75 from $2.
Also Wednesday, AT&T said it would raise prices by an average 4.8 percent on small business calls made to other countries, on an interstate calling plan and the cost of having a toll-free phone number.
LENGTH: Medium: 62 linesby CNB