After years of pennies, profits, and pins dropping, long-distance telephone service providers are starting to raise their rates.
AT&T
Don't expect your phone bill to skyrocket; most new fees will apply only to new customers. This may be the end of an era in which phone companies perpetually tempt users with low fees and nickel rates.
For investors, a truce to the pricing wars may sound like the right connection. AT&T and Sprint are both profitable, and higher markups can only help. Earlier this month, Sprint projected revenues to dip from $15.2 billion to $15 billion next year. The company made the forecast on the heels of layoffs and other cost-cutting moves. If none of the carriers balk at the new fees -- giving the customer little choice in the matter -- even a flat top line can translate into a higher bottom line with the beefed-up margins.
The industry, as a whole, can use a little good news. WorldCom's bankruptcy filing has the sector ailing, and AT&T's cash flow has fallen every year since 1999. While wireless once was seen as the future, cellular spin-offs AT&T Wireless
2003 may be the start of the telecommunication comeback call. Let's just hope it has a nice ring to it this time.