The Birth of the long Distance Resellar Industry

Since 1984, when AT&T divested 22 local telephone companies, the long distance industry has moved toward virtually open competition. Although the market is now dominated by three companies (AT&T, MCI and Sprint) rather than one, a great number of smaller companies also sell long distance services. These companies own call switching systems, but use leased transmission facilities to essentially create their own long distance networks.

About 1989, a new breed of resellers emerged which neither owns call switching equipment nor transmission facilities, but which buys and resells the services of other long distance companies. These companies purchase long distance services from the major carriers at wholesale prices and offer them to customers at deep discounts.

Some advertising cost facts:

• AT&T spends more than $3 million dollars a day in advertising. In 1992, AT&T was the number one most profitable service company in the US, and their profits were up 639% over 1991, yet they control 60% of the market.
• Advertising and promotional spending by telecommunications companies increased 7.7% in 1993 to $3.53 billion and should grow nearly 8% in 1994.
• Overall ad spending for long distance companies, including AT&T, MCI and Sprint, has increased 138% from 1988 to 1994.
• Ten companies, including the three long distance carriers and the seven Baby Bells, will account for over 75% of all ad spending in the telecommunications industry in 1993.

Who do you think pays for these advertising costs? Of course the consumer does. But there are alternatives to the high cost of long distance.

Long distance resellers avoid the overhead of mass market advertising and are, as a result, able to offer rates far below AT&T, MCI and Sprint.

Since AT&T, MCI and Sprint together control about 85% of the market, there is a significant business opportunity available to those interested in reselling lower long distance rates.

As you can see CTCS can save your business substantial on your bottom line on your communications cost.

For more information on the services provided by CTCS send E-mail to JCAR@SUNBELT.NET

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