THE VIRGINIAN-PILOT
Copyright (c) 1997, Landmark Communications, Inc.
DATE: Monday, January 20, 1997 TAG: 9701180228
SECTION: BUSINESS WEEKLY PAGE: 24 EDITION: FINAL
SERIES: 1997 FORECAST
SOURCE: BY DAVE MAYFIELD, STAFF WRITER
LENGTH: 76 lines
Last year we got a taste of what unfettered competition will be like in just about every sector of telecommunications. This year the menu will overflow with even more choices of local, long-distance and wireless phone services.
But in at least one sector, the much-hyped field of Internet services, don't be surprised if the field of providers narrows and rates climb in 1997.
About one thing, there's no doubt: even though rates for individual telecommunications services will generally decline this year as competition expands, the average Hampton Roads consumer will pay more in total for phone services.
That's because we're becoming heavier consumers of such services. Roughly 250,000 local residents carry mobile phones these days. In 1990, that number was closer to 20,000.
Have you added a second phone line at home lately? If so, you're quickly becoming the norm. Bell Atlantic-Virginia said second-line additions, for services like faxes and Internet usage, drove it to a record increase of 141,000 phone lines in service in 1996. It expects another record year in '97.
Meanwhile, add-on services that cost an extra $5, $10 or $15 a month are selling fast, too. Bell Atlantic says sales of its home voicemail service jumped 30 percent in Virginia last year. Caller ID installations soared 45 percent, while Return Call usage skyrocketed by 128 percent.
Statistics on Internet usage are harder to come by. But it's growing rapidly. Literally dozens of locally based companies are now providing access to the global computer network. Five years ago, there were none.
Here's a sector-by-sector rundown of what to expect in '97:
Local phone service. Look for Bell Atlantic, the state's leading local phone monopoly, to face challenges by mid-year from AT&T, MCI and a host of others that will lease capacity on Bell's network to resell services.
GTE, the No. 2 provider, has filed a lawsuit against state regulators to thwart resellers. So Joanne Matz, AT&T's Virginia general manager, said her company and others may have to wait till later in '97 to challenge in GTE's territory.
Cox Communications, Hampton Roads' leading cable TV provider, will try luring businesses to use its network for phone calling by year's end. How soon it will offer residential phone service is less clear.
Long-distance phone. Bell Atlantic will likely offer this service by year's end to Virginia customers. It needs first to satisfy regulators it has taken steps to foster competition in local phone service.
Other regional Bells like BellSouth and Ameritech stand ready to begin courting customers in Virginia, too, as will Cox. They'll resell the services of long-distance giants like AT&T and Sprint.
Wireless phone. AT&T plans to offer a mobile phone service in Hampton Roads market by summer, challenging incumbents GTE Mobilnet, 360 Communications and PrimeCo Personal Communications.
Nextel Communications intends to rev up a stodgy mobile-radio service into a cellular-like service this year. Others may enter in '97, too; even more will join the local fray in '98 and '99.
Internet access. Cox will likely launch a high-speed Internet-access service in Hampton Roads, threatening smaller competitors. Because of worsening delays in cruising the Internet, consumers will gravitate more toward access providers offering higher-cost but faster premium services.
Other than the possible exception of Internet access, rates for individual telecommunications services will likely fall in '97. And companies like AT&T, Bell Atlantic and Cox will push to provide consumers with a complete bundle of services, all on one bill and with one customer-service number to call. MEMO: Staff writer Dave Mayfield can be reached at 446-2270 or by e-mail
at dmay(AT)infi.net ILLUSTRATION: [Color Photo]
[Telephone]
A TELECOMMUNICATIONS BOOM
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[For a copy of the graphic, see microfilm for this date.]
KEYWORDS: 1997 FORECAST TELECOMMUNICATIONS