More customers are overbuying telephone service

More customers are overbuying telephone service

By MEGHANN COTTER

Date published: 1/30/2005

By MEGHANN COTTER

ORE telephone companies are offering plans that package long distance, local calling, the Inter- net, DirecTV and wireless services into one.

Bundled plans are convenient. They allow customers to put all of their telephone charges on one bill.

But a recent study released by the Telecommunications Research and Action Center shows that convenience may not be the most affordable option for consumers.

The TeleTips Residential Long Distance Comparison Chart compared 82 of the most popular telephone plans. It showed that bundled services, which have been marketed as a money-saving mechanism, brought value to those who make five or more hours of long-distance calls each month. Most consumers, however, don't make that many calls.

"While bundled packages appear attractive, for most consumers their value lies more in the convenience of having a single bill rather than as a true money-saver," Samuel Simon, TRAC's founder and chairman, said in a press release.

His telecommunications-focused consumer group researches industry-related issues. It also publishes information to help consumers make informed decisions.

"Bundled services offer a significant value over buying products individually," said Tom Matthews, spokesman for Sprint.

He estimates that the savings can total as much as 35 percent.

Jim Smith, Verizon spokesman, agrees that customers can get value out of bundled plans.

Verizon's maximum bundled product includes a combination of unlimited local and regional service, unlimited long distance, DSL and five popular features--home voice mail, caller ID, call waiting, speed dialing and three-way calling.

Such an offer has one umbrella price and is beneficial to those who use the services heavily or would pay for them individually without a packaged deal.

But the bells and whistles included can be more than the average person needs. Smith said a basic plan that charges a few cents per minute on long-distance calls is enough for some people.

Telephone companies encourage customers to regularly compare their account with their usage habits. Customers can often customize what they buy to better suit their needs.

"Many have been lured [to bundled services] by a promotional deal without thinking about it," Smith said. "You have to shop us online, by yourself, or--even better--with a service representative that can propose what will work better."

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Date published: 1/30/2005