Callers Win From Leaps In Telephone Technology
MCI's and Sprint's announcements this week of new advances bring talk of an information superhighway a step closer to reality
ASPECTS of the telecommunications-information highway of the future arrived a little ahead of schedule this week - adding up to good news for millions of American telephone users.Skip to next paragraph
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Sprint Corporation, the third-largest long-distance telephone company in the United States, introduced a new voice-activated calling product. After dialing an access number, a customer can ask the Sprint computer to call a certain person, such as, ``Call mother,'' or ``Call my wife.'' The computer then recognizes the caller's voice and dials the appropriate number.
``This is a real step forward in new technology; it's very Buck Rogers in concept,'' says Mark Langner, an analyst with TeleChoice Inc., a consulting firm in Verona, N.J.
The technology for Sprint's voice recognition system was developed by Texas Instruments.
At the same time, MCI Communications Corporation, the nation's second largest long-distance telephone company after AT&T, announced that it would work in tandem with various partners to invest $20 billion in capital development projects. These projects will eventually facilitate a diverse array of information to be carried over the phone line, including computer data, movies, and video phone calls.
The company also said it will spend up to $2 billion to develop local telephone services in about 20 major markets to bypass local telephone companies; the first local MCI system is under development in Atlanta.
Having local phone systems would allow MCI to circumvent regional phone companies for its long-distance calls. MCI currently pays local carriers, the so-called ``Baby Bell'' systems, an access charge.
Taken together, the MCI and Sprint announcements mean that ``we are now on the on-ramp'' to the super-telecommunications highway of the future, Mr. Langner says.
``We've been talking about this telecommunications revolution for years, but it's really starting to happen now,'' says Jeffrey Kagan, president of Tele Choice Consulting Inc., in Atlanta. ``The telecommunications superhighway is going to change almost every aspect of our life.'' TeleChoice Inc. and Tele Choice Consulting Inc. are two separate companies.
Sprint, MCI, and AT&T - along with other telephone-related companies - are all working on technological systems expected to revolutionize communications links during the late 1990s. As a result, many telecommunications-related stocks soared in 1993, although they began to drop later in the year.
The new Sprint voice activation system has the potential for use by large numbers of customers, says Dave Schmieg, president of Sprint's Consumer Services Group. Sprint serves more than 6 million customers with its phone network, which is entirely digital and uses fiber-optic cable.
The new voice recognition system is available through Sprint's Priority Gold package, a premium phone service. The voice system allows callers to register up to 10 special numbers with Sprint, although that number of calls may eventually be expanded, Mr. Schmieg says. A user would first ``pre-register'' a voice print. The system is so secure, Schmieg insists, that it will not work for imitations of the caller's voice, or even a tape recording.
To activate the system, a customer would first dial a special toll-free access number; he or she would then speak the caller's voice number, which is a social security number with one extra digit tacked on; once linked to the transfer system, the caller then directs the computer to ring up one of the 10 preregistered numbers.
``Every sound has its own signature,'' Schmieg says; that factor, makes the system virtually fraud proof, he adds. Sprint has been developing the system for about five years, originally as a way of offsetting phone-card fraud. But as work progressed, Sprint recognized the usefulness of the system to customers; thus, a caller can put through a call without having to carry extra phone numbers or rummage through briefcases to find them.
Sprint's system has been tested by about 17,000 customers, Schmieg says. Sprint plans to have the system ready for overseas use later this year.
Whatever the eventual reaction by Wall Street to the Sprint voice activation system, which was announced Wednesday, the investment community has raised some caution flags about the MCI capital development plan, announced Tuesday. MCI shares fell slightly on the NASDAQ market, in part because of concerns that the plan may increase competition with the seven regional Baby Bell phone carriers. The regional phone companies say they intend to take on AT&T, MCI, and Sprint for the loyalties of long-distance callers. Still, analysts say the stepped-up competition will result in lower prices and better service for millions of telephone customers.
Currently, the regional Bell companies are restricted from entering the long-distance market. And only four states allow long-distance carriers to offer local services: Massachusetts, Illinois, New York, and Washington.
MCI currently pays access charges of about 45 cents of each dollar it earns to regional carriers. If MCI were able to establish its own local services, it could save hundreds of millions of dollars, the company estimates.