AT&T PAIRS DISCOUNTS, RATE HIKES

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AT&T is swimming upstream with its latest marketing effort, dangling new discounts for consumers while simultaneously jacking up rates.

The No. 1 long-distance carrier on Jan. 10 breaks a TV and print campaign for a new calling plan, AT&T True USA.

The theory behind the complex new maneuver is that AT&T's rate increase-which some observers say will soon be matched by MCI Communications Corp. and Sprint-will be offset by its new discount calling plan. AT&T expects the rate hike to boost revenues by $750 million.

Advertising for the new service will be handled by FCB/Leber Katz Partners, New York, which won lead agency duties for AT&T's estimated $190 million consumer long-distance account last month.

Ironically, AT&T believes more consumers will sign up for its new discount calling plan after the rate hike, which will have only minimal effect on the average long-distance bill. AT&T True USA, on the other hand, will offer consumers comparatively larger savings.

"Our new program offers more overall benefits to consumers, and we think it will be very attractive," said Jon Mellor, an AT&T public relations spokesman.

Under AT&T True USA, customers who spend at least $10 a month on AT&T long-distance service will reap savings of 10% to 20% on all long-distance calls; customers who spend at least $25 monthly qualify for a 20% savings.

By comparison, AT&T's rate hike only increases a $10 monthly long-distance bill by 47›, or 4.7%.

AT&T True USA comes on the heels of the company's Dec. 18 introduction of a frequency marketing program called True Rewards. Under that program, consumers who spend at least $25 monthly on long-distance services qualify to win rewards of free long-distance calling, frequent flier points or cash.M

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