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Sprint Poised to Resell Local Telephone Service

Posted on: Thursday, 28 August 2003, 06:00 CDT

Sprint Corp. announced yesterday that it will begin reselling local telephone service in the District and 36 states, including Virginia and Maryland, in a move that could put more pressure on other telecommunications companies to reduce their rates.

The nation's third-largest long-distance company is capitalizing on an order last week from the Federal Communications Commission that will allow it, AT&T Corp., WorldCom Inc. and dozens of smaller upstarts to continue to buy local service from regional Bell operating companies at discounted rates, then sell it to customers under their own brands.

Sprint's decision adds to the competitive pressure on Verizon Communications Inc., SBC Communications Inc., BellSouth Corp. and Qwest Communications Inc., which operate the local phone networks and have been losing residential and business business to resale competitors.

The company will bundle its long-distance and wireless services with its local offering at $44.99 to $189.99 a month, depending on the type of service.

Sprint already sells local service covering 5 percent of U.S. households in areas where it owns the local networks, including Las Vegas and Orlando. But it decided to start leasing other companies' lines and reselling local service because more customers are demanding bundles of service, said Harry Campbell, president of Sprint's mass markets division.

"From a customer perspective, local, long-distance and wireless service are very logical to combine," he said.

Bundling services is a growing trend among telecommunications companies, which are selling consumers on the ability to buy a package of services at a discount over what they cost separately.

Long-distance giants AT&T and WorldCom made their big push into the local markets last year and now have more than 3 million local customers each. Verizon, the nation's largest local phone company, added wireless, long-distance service and high-speed Internet access to its bundles last August in some states. Meanwhile, SBC signed an agreement to sell Echostar Communications Inc.'s DirecTV service along with its own products, to compete against cable companies offering telecommunications services.

"Customers are buying more and more bundles, and that's a very important trend," said Blair Levin, a regulatory analyst with Legg Mason Wood Walker Inc.

Reported By TechNews.com, http://www.TechNews.com

(20030828/WIRES /)

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