AT&T Shift Turns Focus to VoIP
As giant telcos retreat from the conventional consumer phone business, the Internet calling wave is rolling in.
On Thursday, AT&T (T - Get Report) joined struggling long-distance rival MCI (MCIP) in de-emphasizing the fast-eroding consumer business. Hard hit by falling prices, the companies intend to focus on the more lucrative business segment.
But just as the long-distance companies are ending their conventional consumer marketing push, the nation's biggest local phone service provider, Verizon (VZ - Get Report), is stepping into the breach. The New York telco on Thursday unveiled a national voice-over-Internet-protocol, or VoIP, calling plan that promises unlimited calling priced about $20 below standard monthly phone service.
Ma Bell's decision to turn its back on the very market it created a century ago is certainly of historical significance. But industry watchers say the move away from conventional consumer phone service was inevitable."They were going down this road anyway," says Forrester Research analyst Lisa Pierce. "Concentrating on business services plays to AT&T's strength." On Thursday, AT&T slipped 20 cents to $14.12.
ChallengesLast month, in the wake of a sweeping pricing rule setback, MCI, the nation's No. 2 long-distance phone company, began
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