Battle to Bundle Net, Phone Service Grows

Qwest Communications’ plan to package Internet access and long-distance service marks the latest salvo in an emerging “battle of the bundles” among phone companies hoping to bring in new customers by offering the convenience of a range of services on one bill.

The impending war reflects the expansion of long-distance companies into other markets--from local phone and wireless service to Internet access and even cable--and could signal a new era where consumers have more flexibility and see lower overall prices for services bought as part of a package.

“No one’s been able to offer the comprehensive bundle yet, and that’s what people want,” said Ken McGee of the Gartner Group, a research firm in Stamford, Conn. “Within two years, I think one of the pieces in a bundle will be free, and the most likely candidate for that is outbound calling.”

But despite the advantages, it still amounts to the same story for phone customers: shop carefully.

Qwest’s plan offers customers unlimited dial-up Internet access as well as 250 minutes of long-distance service each month for a flat monthly fee of $24.95. Additional minutes cost 10 cents each.

AT&T;’s competing service bundle, Personal Network, costs $19.90 per month and includes 150 hours a month of Internet access (about 40 hours a week) and a per-minute price of 10 cents on all long-distance calls.

Other carriers, such as MCI WorldCom, offer to combine services on one bill, but for now they are priced separately.

“Consumers will buy into a bundle as long as every piece of the bundle is the best value,” said Brad Burns, an MCI spokesman.

Indeed, while service packages offer convenience, they make it hard for customers to decipher the price of each component.

Under Qwest’s plan, a customer who typically pays $20 a month for unlimited Internet access would get 250 minutes of long-distance service for $4.95 more a month--about 2 cents a minute if the customer uses up the allotted time.

But in many cases, callers don’t use up all the “free” minutes in their plan, and that raises per-minute prices. An average customer makes about one hour of long-distance calls each month, and at that rate, Qwest’s plan would amount to roughly 8 cents a minute.

The plan’s per-minute cost rises further for customers who pay less than $20 per month for comparable Internet service.

“The Qwest plan can be a good deal if you can use the calling,” said Robert Self, founder of Market Dynamics Inc., a consulting firm that researches long-distance pricing. “But they’re counting on people not using the 250 minutes.”

Self urges callers to match their service plan to their actual calling pattern--or vice versa--to avoid unpleasant surprises on their bills.

That advice also applies to the 5-cent-a-minute calling plan launched Monday by MCI WorldCom and a similar plan unveiled by Sprint last month.

MCI’s plan costs $1.95 a month for long-distance rates of 5 cents a minute on weekday nights and all day on weekends. Sprint’s plan comes with a $5.95 monthly fee and offers the 5-cent pricing between 5 p.m. and midnight nightly in California.

Under both plans, the savings evaporate quickly if customers make even a smattering of daytime calls each month. Sprint’s nickel plan charges 10 cents a minute for those calls, and MCI WorldCom’s package hikes the daytime price to 25 cents per minute.

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Times staff writer Elizabeth Douglass can be reached at elizabeth.douglass@latimes.com.