Making Your Long Distance Dollar Go The DistanceMark Lewyn
Bill Adler Jr. proudly admits he has no loyalty when it comes to long-distance calling. Last month, the Washington (D.C.) book agent switched his three home lines from AT&T to MCI so he could earn American Airlines frequent-flier miles. Less than a month later, he changed one line to Long Distance Wholesale Club, which offered seemingly low rates plus 50% off his next bill. But once he gets the half-off bonus, he is poised to switch again: "I'll go with whoever is offering me the best deal."
There will be plenty to choose from. AT&T started a rate war last year, and MCI and Sprint struck back this month. But figuring out which of these companies--or their smaller rivals--offers the best discount scheme for you requires a hard look at where, when, and how much you call long distance.
TAILORED TRACK. Most plans base their rates on time of day, distance, and volume of calls. If you typically have a monthly bill of less than $75 and a scattershot pattern of calls--over both long and short distances and at varying times of day--MCI's new Friends & Family plan is probably your best bet. MCI offers a 25% discount after you spend just $10 a month. That means a $50 monthly bill becomes $37.50. The discount increases to 30% when your monthly tab hits $75. And you get 50% off when you call other MCI customers in your designated calling circle. If you signed up for the old Friends & Family program, you have to ask to be switched to the new one. The old plan provides 20% discounts and 40% off for dialing others in your calling circle.
The new MCI program usually beats AT&T's True USA plan. While AT&T, like MCI, begins its discount at the $10 calling level, it offers only 10% off at that point. And the discount only rises to 20% after you spend $25. The two programs begin to reach parity when the monthly bill hits $75, when AT&T gives you the same 30% off as MCI. But MCI remains a better deal because the basic rates on which its discounts are calculated are slightly lower.
If your calling falls into a distinct pattern, check out more tailored plans. AT&T Evening Plus is aimed at those who make a lot of calls on weekends or after 5 p.m. on weekdays. It charges 121/2 cents per minute for one hour's worth of calls and 10 cents a minute beyond that hour. Those whose calls aren't limited to off-peak hours but are targeted to a particular area code might consider a plan like AT&T's Select Saver. It charges a competitive 20 cents a minute for weekday calls during the day. There is a drawback to Select Saver and Evening Plus, however. If you don't call within the right time periods or to the right location, you get zinged with much higher rates.
If you make a lot of calls over very long distances--say, from New York to California--two plans heavily promoted by Sprint and LCI International may be for you. These companies offer "postalized" phone rates. Like a first-class stamp, there is a flat rate--on a per-minute basis--regardless of the distance of the call. LCI is particularly attractive for customers who make hundreds of dollars of calls a month because it bills in six-second increments. While most companies would bill you four minutes for a call that lasts three minutes, one second, LCI would charge for a three-minute, six-second call.
You almost always pay a premium for the simpler system, however. With Sprint Sense, you pay a hefty flat rate of 22 cents a minute during
the day, though the 10 cents rate for evenings and weekends is competitive. Once again there's a catch: While Sprint's day rates extend to 7 p.m., others end the day at 5 p.m. So those who hope to get the low evening rate at 6 p.m. won't find this scheme a bargain.
The plans also have initial come-ons. Sprint Sense throws in 100 free minutes of talk time to sign up. And in April, the company, which is aligned with cable giants TCI, Cox Enterprises, and Comcast, is expected to offer several months of free cable programming to new customers.
Not to be outdone, MCI will cut your bill in half for six months if you sign up for the new Friends & Family. Since last year, AT&T has been sending out $25 to $75 checks to encourage people to switch. Endorsing the check means you have agreed to use AT&T. If you don't get a check and call AT&T on your own, it may offer you free calling minutes. Remember, you usually don't receive these goodies until you have been with a carrier for several months.
FREEBIES. And don't forget the freebies to build customer loyalty. AT&T's True Rewards awards five points for every dollar of long-distance calls. The points--earned if you spend more than $25 a month--can be exchanged for an equivalent amount of frequent-flier miles on USAir, United, or Delta. MCI offers miles at the same rate on Northwest, American, and Continental. Sprint has alliances with TWA, Alaska Airlines, and America West. But its new reward plan also gives certificates for discounts on any airline, cruise, or car rental--without blackout dates.
You can use reward points for free calling if you choose. AT&T gives roughly a minute and a half of extra time for each dollar spent with all of its plans. If you spend $50 a month with Sprint, you could qualify in 10 months for $25 of free calling. Some plans even give you money back. AT&T offers a cash rebate of 5 cents on the dollar. If you spend $100 a month you could get a $60 check at the end of the year.
Freebies shouldn't be the decisive factor in choosing a long-distance carrier. The higher bills you would incur by picking an unsuitable plan could well offset the inducements. But from time to time, you can make out by jumping ship. You've got nothing to lose since your new carrier will pay your local phone company the charge for changing long-distance companies. And once the enticements for new customers are gone, you can move on. Any way you look at it, it's a caller's market.
Phone Deals: Cutting Through The Static
AT&T 10% off a bill of $10 to $24.99 People who make fewer than
TRUE USA a month; 20% off $25 to $75 worth of calls in a month
$74.99; 30% off $75 or more. can get a better deal else-
MCI "NEW" 25% off $10 to $74.99; 30% MCI will slash your bills in
FRIENDS off $75 or more; 50% off half for six months just to
& FAMILY calls made to designated sign up. The plan edges out
MCI customers. True USA, especially at lower
SPRINT 22 cents a minute 7 a.m. to 7 The company makes a big
SENSE p.m. Mon. to Fri.; 10 cents week- deal out of its simple flat
ends and 7 p.m. to 7 a.m. rates. But some customers
weekdays; $3 a month could pay more, since Sprint
beginning Apr. 1 for low- keeps its highest "day"
volume callers. rates in place until 7 p.m.