Online Phone Bills Not Perfect, but Will Ring Up Future Savings

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BOONTON, NJ. March 9, 2000:

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Telephone companies who offer online phone bills are still perfecting this new payment option, but in the near future, their electronic billing systems will bring significant savings to the industry and to the consumer alike, says a new report by The Insight Research Corporation.

"Customers who sign on now, however, may have to tolerate some growing pains," says Robert Rosenberg, president of Insight, a leading telecommunications market research firm. "The bottom line is carriers must strive to make online billing a premium service, but at no additional cost to the consumer," says Rosenberg. "A best-in-class online billing service could make consumers less likely to switch carriers."

According to Online Customer Care and Billing, 1.4 million US households will register with their telephone company to pay phone bills online this year. Insight's analysis suggests that consumers will be offered incentives to use online billing since the phone companies will save substantially on processing when customers convert.

"Phone companies spend only 20 cents monthly to process an online phone bill, $2.20 less than it costs to print, mail, and process an average paper bill," says Rosenberg. "But in order to adopt electronic billing, telcos must transfer data from up to 40 different internal systems, a daunting task."

The immaturity of online billing was apparent when Insight's researchers registered with three carriers:

• AT&T. Our researcher was offered a 10 cents per minute rate, not 9 cents as promoted in a brochure. He was also told that online billing would invalidate his 5 cent per minute weekend plan. However, the 10 cent offer did not incur a monthly fee like the weekend plan.
  
  
• MCI WorldCom. Our researcher got transferred to three different representatives, the first of whom had never heard of online billing. She was also incorrectly told that changing to online billing would void her airline mileage bonus plan.
  
  
• Sprint. Our researcher had difficulty logging on to Sprint's online account manager system. Attempts to get help over the phone involved busy signals and long waits on hold. Why? Sprint's server was down.

"Phone companies understand the benefits of online billing, but consumers need to be convinced that there are advantages for them, too," says Rosenberg.

More online billing and customer care information is published in this market research study written for the telecommunications industry. See www.insight-corp.com/isp.asp for a free report excerpt and table of contents.

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Donna Savino

at Insight Research

973-541-9600