By Robin Gareiss, Principal Research Officer, Nemertes Research
July 15, 2004

MCI recently issued a letter to enterprises boasting new rate cuts, which slash service costs by 25% to 40%. To stay competitive, AT&T and Sprint are following with similar decreases. The move raises two questions: Will MCI wind up back in bankruptcy court? And will enterprises really cut their telecom spending? Doubtful and no.

Carriers are reducing rates, but there are a few safeguards for their bottom lines.

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