The Long Distance Phone Industry

Paper Summary:

This paper considers the market structure of the long distance phone industry, the company Sprint's position within that industry and Sprint's actions with regard to pricing and product development as a participant in this industry. It discusses how the long distance market is highly competitive and how the competition takes place in the environment of an oligopoly, a market characterized by only a few sellers who share an interdependence.

Outline
Introduction
Market Structure
Sprint's Position Within the Industry
Pricing and Product Development Strategies
Conclusion

From the Paper:

"Sprint's size and product diversity (including its wireless service) enables it to engage in the price wars which have resulted in increased market share. In this way, it has benefitted from economies of scale which are driving the cost of long distance service so low as to be nearly negligible. Long distance companies such as Sprint and AT&T spend considerable amounts of money marketing and protecting their long distance markets and much of what consumers spend on long distance goes to support this so-called "billing" relationship (Jenkins, 1999, p. A31)."

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