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Time - Man of the Year
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1992-08-28
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BUSINESS, Page 59Business NotesCOMMUNICATIONSBeating The Spread
A 10-minute call from Rome to New York City costs $32.30;
New York to Rome is only $8.91. Using a patented
call-back-conferencing mechanism he describes as "telephone
arbitrage," Howard Jonas can make the price spread between
foreign utility monopolies and deregulated American phone
companies work to your advantage. His company, International
Discount Telecommunications, bills intercontinental calls
originating abroad at cost: American rates, which are 38% to 82%
below foreign charges. I.D.T. profits from a $250-a-month
customer fee. In the year since Jonas, 35, started, he has
signed up more than 150 international companies. Angry foreign
phone monopolies are fighting back with their own price cuts.
Jonas is responding by getting additional volume-discount deals
for his customers from long-lines carriers.
At $3 billion a year, international telecommunications
ranks as the fourth biggest drag on the U.S. trade deficit. With
a simple idea and 15 employees in the Bronx, Jonas just might
make more of a dent in that deficit than a pride of automakers
on a presidential trade mission.