The Big THREE set out to tackle Local markets
While AT&T, MCI and Sprint aggressively fight the long-distance ventures of incumbent local exchange carriers (ILECs), they continue grappling with strategies that will help them get into lucrative local markets. ILECs have the advantage of owning the local-loop copper, operational support systems, customer records and just about anything else that matters. AT&T has even tried to merge its way in, unsucces
sfully, by courting SBC. Of the Big Three, only MCI has made a substantial investment in local service and is moving rapidly to deliver.
AT&T Local Service has toeholds in California (through Pacific Bell resale) and Connecticut. It plans soon to move into Florida, Georgia, Illinois, New Jersey, New York, Texas and Utah--principally by reselling competitive local exchange carrier (CLEC) services. Across the United States, AT&T offers a predominantly outbound-only local calling service, Digital Link, used by customers with T1-connected PBXes.
Sprint has filed for CLEC status in 48 states, and has been awarded it in 36 states and in the District of Columbia. It is offering only residential phone service in Orlando, Fla., and San Diego, San Francisco and Santa Barbara, Calif. In these areas, Sprint offers expanded calling areas, as compared to those provided by ILECs.
MCI is much more aggressive. By year's end, MCI estimates that it will ha
ve invested $1.7 billion in developing MCI Local Serv
ice--and will have lost almost half of that trying to pry its way into the market. It is using a mixed strategy: building its own network facilities, partnering with other providers and signing lease/resale agreements with regional Bells. When MCI builds its own switching centers, it uses both Siemens Stromberg-Carlson EWSD and Northern Telecom Nortel DMS-100 switches.
MCI Local Service offers an impressive service menu--inbound and outbound local calling, domestic and international long distance, data services including dedicated links up to OC-3c, cellular and paging, toll free, Internet access, intra-local access and transport areas (LATA) toll calling, and voice messaging. To make analysis easier for prospective customers, MCI tends to mimic the service plans of the incumbent.
While services purchased ˆ la carte are often cheaper than the incumbent's, the real advantage comes when services are purchased in a bundle--offering deeper discounts across both the local service and MCI's traditional line
s of business. This simplifies administration through a single contract, single bill and single point of contact for all MCI services. Contracts cannot, however, include any international offerings from Concert (MCI's joint venture with BT).
MCI Local Service covers 23 cities with its own fiber (see map on page 78). When a city is brought online, customers are offered the full portfolio of MCI services. Its competitors don't offer all services in every market. MCI has adopted a resale strategy in California and Connecticut, though that may change, since MCI has been unhappy with Pacific Bell's service reliability in California. During 1997, MCI Local Service moved into Newark, N.J.; Minneapolis; Dallas; Houston; San Antonio; Cincinnati; Fort Lauderdale, Fla.; and Washington.
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