Originally created 08/15/98

AT&T sets minimum monthly long-distance charge



NEW YORK -- AT&T Corp. will start charging long-distance customers a minimum of $3 a month in a bid to pare losses from those who don't make a lot of calls.

The minimum charge takes effect Saturday for new AT&T customers who sign up for calling plans, and on Jan. 1 for all current customers who change calling plans covering long-distance calls.

AT&T, the nation's largest long-distance company, said it loses $300 million a year on the 15-20 percent of its 70 million customers who spend less than $3 a month on long-distance calls. The company estimates 15 percent of new customers spend less than $3 a month. The costs stem from such expenses as bill processing and customer service.

The minimum fee is part of a broad cost-cutting drive by AT&T chairman C. Michael Armstrong as he tries to revive lackluster revenues in the company's core telephone business.

Customers will pay the minimum charge only for those months when their long distance charges amount to less than $3. For example, someone spending $2.50 in a given month would pay 50 cents more to meet the minimum.



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