Dial Around : The Winners and Losers

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Dial Around The Winners and Losers

• Presented By
• John Schiela
• PNR and Associates, Inc.
• Director, Telecommunications
• (215-886-9200)

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Agenda

• Overview of PNR and Associates, Inc.
• Dial around company overview
• Many offers confuse the unsophisticated
  consumer.
• This confusion leads many consumers to not
  optimize their potential savings.
• Usage profiles
• Higher value customers are using dial around
  services.
• Demographics and perception
• For the most part, dial around users come from a
  cross section of the US demographic profile.
• The perception and reality of dial around usage
  show significant consumer confusion.
• Next steps

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PNR and Associates, Inc. OverviewTLC (Trends and
Linkages In Communications)

• TLC MarketShare Monitor
• Joint venture PNR and Market Facts
• Survey response from 250,000 households yearly
  (customer loyalty, switching likelihood, 2nd line
  and feature penetration)
• Bills collected from nationally representative
  sample of 24,000 households per year (Bill
  HarvestingTM)
• Bill data captured via bill format specific,
  in-house built, proprietary software
  applications.
• Facilitates monthly bill data capture of all
  information on telecommunications bills.
• Computer automated real time data quality
  checking and follow up external and internal
  validity checks.
• Project team with over 100 years combined
  Telecommunications research experience.

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PNR and Associates, Inc. Overview TLC (Trends
and Linkages In Communications) (cont.)

• ReQuestTM
• Cross-utility consumer survey (Once a year with
  over 30K responses)
• Examines complete suite of residential utility
  providers
• Attitudes towards service providers
• Interest in new products and services
• Emphasis on wireless services
• Complements MarketShare
• BusinessWaveTM Panel and Surveys
• Detailed information on how small and medium
  businesses use and regard telecommunications and
  utilities services.
• Combines consumption data with attitudinal
  information from a nationally representative
  cross-section of small and medium companies
• Switching Behavior

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PNR and Associates, Inc. Overview TLC (Trends
and Linkages In Communications) (cont.)

• National Access Line Model
• Estimates of residence and business access lines
• State, county, tract, Wire Center, CBG or census
  block level of detail
• Partnership with Metromail and Dun Bradstreet
• Access to demos and home data.
• Access to firm data
• HomeScoresTM
• BusinessScoresTM
• Custom Analysis and Model Development

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Dial Around Overview

• Dialing around is using a 5 (now 7) digit access
  code 10-10-xxx prior to making a phone call. The
  call will then be carried by the dial around
  provider and not the dial one PIC'd provider.
• For the purposes of this analysis calls were
  considered dial around if they were made using an
  IXC provider whose primary marketing strategy is
  transaction based dial around. Henceforth
  referenced as DA providers.
• This preliminary analysis does not address the
  rapidly growing local company dial around or Dial
  Around usage with providers whose primary
  marketing strategy is subscription based.
• This analysis utilized 1997 Bill HarvestingTM
  information and 1997 ReQuestTM information.

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8 Top Dial Around Providers Account for 96 of
1997 DA Minutes, Revenue and Messages
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Overview Top 4 Advertised Offers

• Vartec
• Dimeline (10-811)
• 5.00 Monthly Fee (recently removed)
• 3 minute minimum call
• 10 cents minutes (some Intrastate less, excludes
  Maine)
• Telco
• Dial Save (10-457)
• 25 off ATT basic rates on state to state calls
• Unspecified savings on in state and international
• LD Wholesale/Telco Choice (10-297)
• Historically savings of 15 to 50 off
  ATT,MCI,Sprint basic rates depending on call
  distance.
• Currently
• 10 cpm on state to state calls after 5pm and
  weekend
• 15 cpm on state to state calls all other times
• Telecom USA (MCI) (10-321)
• 50 off of ATT on calls over 20 minutes
• Less than ATT on all others.

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Realized CPM (total revenue/total minutes)
Sprint Customers realized savings are less than
one cpm.
Calculations include all call types made in all
categories.
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Over Twenty Minute Direct Dialed Calling for
Telecom USA Users
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Under Three Minute Calling for Vartec Users
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Telecom USA has half as many Exclusive users and
20 more ATT dual users than the other major
Dial Around companies .
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On Average DA Dual Users are higher value
customers while DA exclusive users are below the
25 overall IXC monthly average.
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Vartec is capturing the largest percentage of
revenue.
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Do you make long distance calls using a 10-XXX
Access Code ?
Sprint Customers are Least Likely to use an
access code in making a long distance call.
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Would you dial around your PICd Carrier for XX
Savings?
ATT PICd Customers are Least Likely to
Knowingly Dial Around to Another Access Provider
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The distribution of DA users Age is similar to
that of the sample population
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Consumer perception and usage of dial around
begin to converge after 55 years of age.
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The distribution of DA users Education is also
similar to that of the sample population
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Similar trends are seen in actual Vs. self
reported Dial Around usage by education.
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The Dial Around Income distribution is similar to
the sample population except for the 30k to 60K
category in which the DA usage is higher.
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Dial Around perception of use increases
consistently by income. Where as the actual usage
has a distinct break point at 50K.
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Conclusions/Next Steps

• Dial Around telecommunication providers offer
  some savvy consumers, with the right usage
  patterns, the opportunity to realize significant
  savings in their telecommunications spending.
• The average consumer seems to be some what
  confused over transaction based calling offers,
  what they mean and how to use them.
• The next items being examined are dial around on
  local provider networks, dial around to bypass
  local (intra-lata) providers and dial around on
  the subscription (PIC'd) based providers.
• For additional information on dial around, or
  information on any of our other products, please
  contact me at 215-886-3617.

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Dial Around The Winners and LosersQuestions?

• Presented By
• John Schiela
• PNR and Associates, Inc.
• Director, Telecommunications
• (215-886-9200)