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Qwest in Net/phone deal
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August 10, 1999: 8:07 a.m. ET
MCI WorldCom rival offers Internet access and long-distance package
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NEW YORK (CNNfn) - Qwest has fired its first shot in what looks more and more like a long-distance price war.
The Denver-based telecom announced a plan Tuesday to provide customers with unlimited Internet access and 250 minutes of domestic long-distance calling for $24.95 a month. Any additional state-to-state calling minutes beyond the first 250 in a given month will be charged at 10 cents per minute.
The Internet/phone service package comes on the heels of MCI WorldCom's announcement Monday that it will offer 5-cent-a-minute calls during off-peak hours.
While MCI WorldCom's news may have pleased customers, investors sent the stock down 3-13/16 to 77-7/16 Monday, fearful such a cut-rate deal would slice into earnings despite MCI WorldCom (WCOM) assurances that lower prices will boost its phone business, the Wall Street Journal reported Tuesday.
Competitors' responses
Analysts told the paper that MCI WorldCom's latest offer will make the long-distance market more competitive, though they aren't sure how the market's current leader, AT&T, will respond.
AT&T (T) didn't match MCI WorldCom, which offers customers 5-cent-a-minute calls on weekdays from 7 p.m. to 7 a.m. and all the time on weekends for a monthly fee of $1.95. Instead, AT&T told the Journal, its future is based on selling bundles of services and not just on price and long-distance.
Sprint (FON) said MCI WorldCom is following in its footsteps. Sprint now offers a Nickel Night plan, which lets customers make calls from 7 p.m. to midnight for 5 cents a minute for a monthly charge of $5.95.
Nevertheless, analysts said, AT&T and Sprint soon will be on the front lines of a price war.
"MCI has gone back to an age-old proven method in that price moves the market," Yankee Group telecom analyst Brian Adamik told the Journal. 
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Qwest
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