It's a dog-eat-dog, dial-around world

Who's that lucky dog-that one on TV, encouraging you to use dial-around to win wonderful prizes? Any industry observer could tell you, especially after the success of MCI's secretly marketed 10-10-321 dial-around service, that Lucky Dog Phone Co. is no small carrier. That Lucky Dog is AT&T.

The campaign and the service are departures for AT&T, which has always used its brand name in advertising. Lucky Dog, a wholly owned subsidiary of the interexchange carrier, offers a service that will be used predominantly by non-AT&T customers, said Howard McNally, president and CEO of Lucky Dog and vice president for transaction services at AT&T.

"The segment we're trying to reach is people who are thrifty," he said. "They're people who are willing to dial a number to save some money."

Integral to the service, he said, are the prizes customers can win by dialing in. Because the dial-around number is 10-10-345, Lucky Dog will award 345 prizes a day, with one $1 million prize to be given away in January.

McNally acknowledged that the service has been spurred by the success of competitors' dial-around offers. "We're actually taking a page out of what other consumer marketing companies have done," he said. AT&T has criticized the 10-10-321 campaign by MCI's offshoot, Telecom USA, for being misleading. We thought their pricing was very confusing," he said. "That's why we decided that we'd be very clear."

The Lucky Dog service requires a 10 cents per-call connection fee and costs 10 cents a minute. According to McNally, the 10-10 prefix on the access number will remind customers of the rates.

Dial-around has been popular because it doesn't force a customer to sign up for a particular service plan. A dial-around carrier also has to pay very little in PIC charges-the monthly fees that presubscribed IXCs must pay local exchange carriers on a per-customer basis.

This could be an incentive for a carrier to offer dial-around, said Boyd Peterson, an analyst with The Yankee Group.

"[AT&T] didn't like that it had to pay PIC charges for customers that dialed around its service, and then it wouldn't get any revenue from those customers," he said.

However, AT&T's campaign is probably more about successfully targeting a popular market segment, Peterson said.

"There's clearly a market out there for this kind of product," said Richard Christner, a vice president at Mercer Management Consulting. The service, he said, is like cutting out coupons-people like doing extra work to save money.

Lucky Dog will reach new customers because dial-around users aren't typically moved by big names, said Steve Koppman, senior analyst with Dataquest. He added that it's a good way to target consumers, who are sought after less than business customers.

The service is available in 25 markets, and the multimedia ad campaign includes television commercials featuring the voices of Larry Hagman and Kathleen Turner, among others.