Mixed message, AT&T's 15 plan aims to soothe worried investors >BY Denise Pappalardo, East Coast Bureau Chief

AT&T announced last week that its earnings for the third and fourth quarters will fall short of analysts' predictions by as much as 10%. Trying to soften the blow, AT&T simultaneously unveiled a flat-rate pricing structure for its long-distance services.

The expected dip in revenues can be attributed to AT&T's loss of customers and the slow implementation of its new billing system, said Chris Landes, consultant for mobile and enhanced services at TeleChoice Inc., a Verona, N.J.-based consultancy.

AT&T believes its losses stem from increased competition. "The number of customers moving between carriers is still disturbing," said Chairman and Chief Executive Officer Robert Allen in a letter to stockholders.

Competitors such as LDDS WorldCom, LCI, and Cable and Wireless have been able to simplify services and coordinate billing, effectively winning over customers in certain pockets across the country where AT&T has resisted changing its pricing structure, Landes said.

The new plan, called AT&T One Rate, allows customers to make interstate and intrastate long-distance calls for 15¢ a minute. While the idea of flat-rate calling plans is not a new one, AT&T's pricing is aggressive and does not limit customers with time restrictions.

Sprint Sense, MCI One and LCI's All-America Plan already offer flat-rate calling that makes long-distance billing easier for customers to understand.

AT&T is following suit by trying to simplify its customers' lives with flat-rate billing, said Joseph Nacchio, executive vice president of AT&T's consumer and small business division.

Its offering, however, "may be too little too late," Landes said.