Long Distance: New Report Shows Users and New Carriers Win From Competition for International Calls - Industry Trend or Event

EDGE, On & About AT&T, Jan 25, 1999

Competition let international telephone callers stay on the phone 6 billion minutes longer in 1997 for the same price they paid in 1996, according to a new 90 country survey by TeleGeography, Inc. (TGI), a Washington, D.C. research group (http://www.telegeography.com). Users talked more and paid less in 1997 because while international calls grew 14 percent from 1996 to 82 billion minutes, revenues for overseas calls rose just 5 percent to $66 billion. Thus, the average price per minute fell. TGI's report forecasts that prices for international calls will continue to fall through at least 2001 as competition from alternative carriers and the Internet accelerate. "Customers and new players are seeing real benefits from the competition which now exists in over 40 countries," said Gregory C. Staple, TGI's President. "Since 1990, new international carriers have won over 11 percent of the market worldwide." The pressure on incumbent carriers is especially evident in the U.S. market. In terms of traffic, the three largest carriers (AT&T, MCI and Sprint) all lost market share in 1997. Newcomers such as Pacific Gateway Exchange,

WorldxChange, and STAR Telecommunications saw their market shares grow. Similar trends were evident elsewhere. Although competitive markets generally grew faster than monopoly ones (e.g., international calls rose nearly 30 percent in the U.K. in 1997), incumbents from Australia to the Netherlands generally lost market share. However, the report found that the threat of new entrants can spur growth too. For example, Swisscom and France Telecom saw double digit growth in 1997 as each carrier cut prices in anticipation of open markets in 1998. The TGI report, TeleGeography 1999, is the 10th annual survey of international telecommunications release by the company. In addition to providing telephone traffic data for over 1800 routes, the 290 page report contains extensive data on international carrier networks (cables, satellites), retail and wholesale call prices, and industry investment. The report also features a special 15,000 word survey of the global Internet with original backbone transmission maps for Europe, Asia, the U.S., and Africa.

Top 10 International Carriers, 1997
Rank Carrier                    Country           Outgoing
                                                Minutes (bn)
1.   AT&T                       United States     10.3
2.   MCI(a)                     United States      5.9
3.   Deutsche Telekom           Germany            5.3
4.   BT                         United Kingdom     3.7
5.   France Telecom             France             3.5
6.   Sprint                     United States      2.8
7.   Telecom Italia             Italy              2.4
8.   Swisscom                   Switzerland        2.2
9.   C&W Communications         United Kingdom     2.1
10.  Stentor                    Canada             1.8

Outgoing totals are in billions of minutes (a) WorldCom separately sent 1.4 billion minutes in 1997.