The telephone companies are on the prowl. Maybe you've already noticed it. How about the time the Amway man tried to sell you MCI's long-distance services? Or maybe you know someone who's going to the World Series, courtesy of GTE Sprint. Or perhaps your parents gave you an AT&T ``Call me'' card before you went off to college, allowing you to bill them for calls you make home (but nowhere else).
Long-distance companies are trying to bag your business while they can. The next 12 months are likely to determine who's going to make it and who won't in the cutthroat world of deregulation.
The ``other common carriers'' (OCCs) -- long-distance companies other than AT&T -- need to sign up as many customers as possible by next September, when two-thirds of the country will have ``equal access.'' That will give the OCCs the same quality of hookup to local telephone company switches as AT&T, and allow people to use a service of one's choice by dialing ``1'' instead of a long access code. This process will pretty much cement the OCCs' market shares.
``There is a certain measure of panic among all the OCCs, except for MCI,'' says Maurice E. May, vice-president of research at the Ferris & Co. brokerage. ``If they don't get market share by the end of equal access, it will be very difficult to increase it.'' And that, he says, could spell extinction for everyone but AT&T and MCI.
In June, long-distance competitors scored a major coup over AT&T. The Federal Communications Commission (FCC) ruled that customers who don't choose their long-distance carrier when asked to do so (by ballot or letter) will be allotted a long-distance carrier in the same proportion as those who do choose. Before, AT&T got all the ``default'' customers.
But Mr. May has noticed a shift in attitude at the FCC away from the OCCs. The commission has not granted their request that entire cities, rather than just neighborhoods, be converted to ``equal access'' at the same time. This hurts TV advertising, since only a few people seeing the ads would be choosing their primary carrier at any given time.
But the alternative, direct marketing, is tough, too, since the OCCs do not have access to AT&T's customer lists. AT&T contends it's been developing the lists for more than 100 years and they should be proprietary; the FCC apparently agrees.
Moreover, the decision on balloting has galvanized AT&T, says MCI spokesman Gary Tobin. ``In the past, AT&T's only aim was to keep customers, not acquire new ones,'' he says. ``AT&T is doing more experimentation . . . and they have have a lot of money to play with.''
Indeed, AT&T is spending an estimated $400 million on advertising this year. While AT&T may not have boosted its ad budget after the June decision, the commercials have more of an edge to them.
Perhaps more important is AT&T's increased sophistication in marketing. The former monopoly, which catered to all needs, is now targeting specific segments, says Rick Roscitt, director of consumer program marketing. Those segments are the 17 million households, many of them in the mobile baby-boomer age, relocating each year; college students, the tail of the baby boom; the military; working women; and those working at home.
AT&T is not competing only on price -- it lowered its long-distance rates 5.6 percent last summer, forcing the OCCs to follow. AT&T is also offering long-distance gift certificates at some 800 banks and through the mail, pushing the AT&T card, and issuing the ``Call me'' card.
AT&T's competitors are hard pressed to keep up. GTE's Sprint is spreading its $60 million-plus budget for marketing and advertising as far as it can go, with eight TV ads running nationwide in its ``Straight Talk'' campaign. The company says it has stepped up its campaign because it now has more capacity, not because of the FCC balloting decision.
But the tenor of the ads has changed, says Ralph Sherman, director of advertising. ``Now we talk about quality, value, specific business products'' and Sprint's $1.5 billion investment in its network.
As for marketing, a ``Sprint to the Series'' sweepstakes has generated many new sales leads, Mr. Sherman says.
The company also sponsors local sports events and solicits Citibank's MasterCard and Visa users.
But as equal access spreads and the OCCs lose the 55 percent discount they get from local phone companies because of their inferior hookups, Sprint may find it difficult to keep undercutting AT&T.
MCI, with a network estimated at one-third the size of AT&T's, appears the least worried. In January, MCI divided its marketing and sales operations along the same seven regional divisions as AT&T.
``The marketing people in the field have the information on the best way to advertise in a given market,'' says Mr. Tobin. Decentralization has allowed MCI's direct marketing efforts to be more personalized; to use outlets like Amway; and to set up free-call phones at events such as the Monterey Jazz Festival or sporting matches. MCI is establishing booths in Sears, Roebuck stores across the country and is marketing via Sears and American Express credit card mailings.
Even during this make-or-break-it period, however, advertising has not been as heavy as many observers had expected. That may reflect the hesitance of OCCs, except for MCI, to sink more money into the business. Standard & Poor's estimates that Sprint will lose $240 million next year just from higher access fees and having to cut prices. MCI will lose some $300 million in access fees alone. And some analysts say the smaller carriers may eventually be forced to throw in the towel.