cr> Telecom Companies’ Costing Models Obsolete?


Craig A. Johnson

Queries:  Will telcos change pricing strategies to correspond to 
economic realities?  How, who will lead, how will the Internet figure 
into their business plans?


Date:          Sat, 20 Jan 1996 15:04:19 -0500
From:          Dave Farber <•••@••.•••>
Subject:       IP: the Brits got it right on!!! [funny we keep telling the US
               Telcos that and they don't seem to listen djf]
To:            •••@••.••• (interesting-people mailing list)

The London stock brokerage firm Durlacher says in a report that telecom
companies underestimate the threat posed to their business by the Internet:
"Their greatest difficulty is that telecom operators run business based on
charging for the cost per unit of time used.  The long-term marginal costs
associated with a local call are now, however, heading toward zero.  In the
future, charges will be made for content that is accessed rather than the
cost of moving the material from the host machine to the users."  The report
warns that technical developments could leave telecom operators "with an
obsolete system, of no obvious value, other than the recycle value of the
copper in the cables."  (Financial Times 15 Jan 96 p6)

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