C&W revs up consumer ISP race: Bets on low price and long-distance deals

Cable & Wireless USA hopes to use pricing and inexpensive long-distance to draw residential customers to its Internet service, to be known as Cable & Wireless Internet Xperience.

It will be the first consumer marketing push for the network-previously known more for servicing dedicated and dial-up business clients-since parent C&W PLC bought it from MCI last summer.

CWIX will offer customers 150 hours of on-line service, e-mail and a free Web page for a monthly fee of $14.95. In addition, CWIX customers can enroll for Complete Long Distance and pay 7 cents a minute on weekdays and 5 cents a minute on weekends for U.S. interstate calls.

The company already makes the same offer to the 250,000 dial-up users it acquired in the MCI backbone purchase, said Bruce Gudenberg, director of CWIX product marketing for C&W USA. The company hopes to attract a broader base through advertising on TV, radio, billboards and the Web.

C&W made a strategic decision to offer the long-distance deal to only CWIX customers, said Gudenberg. "We decided we wanted to be an Internet company that offered long-distance, not the other way around. The competition in the long-distance market is too great."

The tactic will produce incremental revenue from current Internet customers who opt for the long-distance service, said Debra McMahon, vice president of Mercer Management Group. But she doubts it will attract new customers.

"Bundling Internet service and long-distance service is a very segmented strategy," she said. "The intersection of households that are on-line and use long-distance heavily is not large-perhaps 15% of the total."

C&W USA might do better to add value for more focused market segments, such as home offices or the early adopters of sophisticated software, said McMahon.