Ameritech Corp. will be the first of the regional Bell operating companies to begin an all-out feud with a sibling by launching a full roster of competitive phone service for residents of St. Louis, the Chicago-based firm said Thursday.
Ameritech will go head to head in St. Louis with SBC Corp., the former Southwestern Bell, which is a regional Bell monopoly that, like Ameritech, was formed in 1984 with the breakup of the Bell System.
Beginning next year, St. Louis businesses and residences will be able to buy their local and long-distance phone service from Ameritech as well as cellular and other wireless services, said Thomas E. Richards, an Ameritech executive.
The move is a natural one for Ameritech because it already supplies full local phone services to more than 500,000 customers in Illinois just across the Mississippi River from St. Louis. And its name is well known in Missouri, where it has provided cellular phone service for years.
SBC is parent to Cellular One, which offers cellular phone service in the Chicago area in competition with Ameritech, and SBC offers long-distance service in the Chicago area, but it hasn’t begun to compete directly with Ameritech in its core local phone business here.
Like many Bell companies, SBC has filed paperwork with the state that would enable it to offer local service in Illinois, but it hasn’t announced any plans to do so.
“Ameritech is the first Bell company to make the big move into another Baby Bell’s core business,” said Jeffrey Kagan, a telecommunication analyst based in Atlanta. “We’ve been waiting for someone to break the logjam, and Ameritech is the one to do it.”
If its foray into St. Louis is successful, Ameritech will probably launch local and long-distance service in other markets, said Richards.
“We are confident of our success in St. Louis,” he said, “and there’s a fair possibility we will go elsewhere. Part of our overall strategy is absolutely to support competition.”
Like other Baby Bells, Ameritech has put its top priority in offering long-distance service to local-service customers in its home territories. That will be possible under the federal telecommunications law enacted in 1995, once the government decides that local monopolies are fully open to competition.
But federal authorities have ruled against Ameritech’s petition to provide long distance to its Michigan customers, saying the firm has failed to open its Michigan markets fully to competitors. Michigan is the only state in Ameritech’s home region where it has sought such approval.
Until Thursday’s Ameritech announcement, the Baby Bell companies have been more or less united in their desire to offer long-distance service to customers in their own respective markets, and their competitive urges have been directed mostly to that end.
Bell Atlantic Corp., for instance, which offers local service in New Jersey and Pennsylvania near New York City, might have gone into direct competition with Nynex, the Bell monopoly in New York. Instead, the two Bells merged.
“The first choice for every Bell company has been to expand business within its home region,” said Kagan, the analyst. “But Ameritech is the first one to think outside the box and go outside its region.”
Winning customers in St. Louis should be easier for Ameritech than for many other companies, said Anthony Ferrugia, an analyst based in St. Louis with the A.G. Edwards company.
“The Ameritech brand name is already well-known here,” he said. “They advertise products in print, on radio and billboards. This move is as positive an out-of-region move as a Baby Bell could make.”
