Long Distance Phone Service : From monopoly to Oligopoly

The strategy has paid off in two ways: the company has become the nation's second largest long-distance carrier (behind AT&T), and it has efficiently discouraged other companies from competing in this marketplace (Reimer, 1995, p. 758). The business has also put substantial work into its research and development effort, establishing a 3,556 million circuit-mile microwave and fiber network which offers higher high quality of service.

Sprint Corporation, which offers long-distance program via its U.S. Sprint group, stands out as the third largest long distance carrier, but it has adopted a strategy several from MCI's and much more similar to AT&T's inside many years because the breakup of AT&T. Wherever MCI has concentrated on long-distance program as its core business, Sprint has sought growth through acquisition, and has expanded into markets outside of long-distance, although nevertheless from the telecommunications industry. In addition to its extended distance service, Sprint also offers mobile phone services, and it has formed a global alliance

 

AT&T reacted towards breakup of its operations in 1984 by aggressively entering new markets and by utilizing its substantial financial resources to protect its long-distance market. Although AT&T lost industry share to MCI and Sprint, it's still the nation's premier lengthy distance provider, with more than $47 billion of its 1995 revenues coming from telecommunications services (Reimer, 1995, p. 744).

With France Telecom and Deutsche Telekom to deliver "seamless" international telecommunications service. Sprint depends on domestic long distance service for only slightly more than 50 percent of its revenues, with local phone support along with other segments contributing the remainder (Reimer, 1995, p. 766).

In a move that surprised many, AT&T has recently announced that it plans a second breakup, this one voluntary, that will divide its business units into 3 companies: AT&T will continue to refer towards telecommunications services from the company.

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