article

Excel Announces Domestic Long Distance for 3Cents a Minute

Posted: 11/1999

Business News

Excel Announces Domestic Long Distance for 3
Cents a Minute

By Liz Montalbano

Excel Communications Inc., a subsidiary of Reston, Va.-based Teleglobe Inc., announced
in September a long distance calling plan offering residential interstate long distance
for 3 cents a minute between 7 p.m. and 7 a.m. seven days a week.

Excel’s Three-Penny Plan will be available only to customers who sign up between Oct.
15 and Dec. 31. The interstate rate between 7 a.m. and 7 p.m. for the plan is 10 cents per
minute, intrastate rates vary, and the plan has a monthly service charge of $5.95.

The plan is the latest move in a long distance pricing chess game that may baffle even
the most savvy consumers, especially since it comes on the heels of several
nickel-a-minute pricing plans by Sprint Corp., MCI WorldCom Inc. and GTC Telecom, Costa
Mesa, Calif., and a flat-rate 7-cents-a-minute plan by AT&T Corp.

On the surface, Excel’s Three-Penny Plan may seem like a good deal. Three pennies a
minute is indeed the lowest any of the major players in long distance have offered. But
the plan, like those of the Big Three, saddles consumers with a sizable monthly service
charge, while GTC’s does not. It also, like Sprint and MCI WorldCom’s plans, is offered
during limited calling hours, while GTC and AT&T offer their rates any time.

The plan also doesn’t include intrastate rates and is offered only in a very narrow
time frame. These reasons, among other things, are why Carl Garland, principal analyst,
network services for Sterling, Va.-based Current Analysis Inc., is not impressed.

"Excel’s long distance announcement is a mystery for a bunch of reasons," he
says. "… Why introduce the complexity of time windows when other plans have
eliminated them? … Why not address the expensive intrastate calls?"

Most importantly, Garland thinks Excel is only confusing the issue. The provider
already had an impressive long distance plan, Excel Simply 7, which offered a flat-rate
7-cents-a-minute for interstate calls without time or usage restrictions nearly a year
before the No. 1 long distance provider launched One Rate 7 Cents. While Excel founder and
CEO Kenny A. Troutt says the new plan "will meet the needs of consumers with heavy
interstate calling patterns during off-peak hours," Garland thinks if it wasn’t
broke, Excel shouldn’t have fixed it.

"Why make such a big deal about a plan that isn’t very competitive?" he asks.
"Excel has traded in its Simply 7 Plan for its Complicated (Not Really) Three."


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