2005 Interstate Telephone Rates Survey


Table of Contents

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Interstate Telephone Rates Survey 2005

As mega-mergers change the face of the telecommunications industry, Consumer Action (CA) reveals in its new Telephone Rates Survey that the big players have become more homogenized in their offerings—leaving consumers with fewer choices and higher rates.

In 2000, when the Baby Bells first offered long distance service, CA noticed a big spread in rates among carriers. The first of the Baby Bells to enter the field were SBC and Bell Atlantic (now Verizon), and they hit the ground running with very low basic rates that seriously challenged the dominant carriers, AT&T and MCI.

As recently as last year, there was still a huge gap between the basic rates of AT&T and MCI on one hand, and Verizon and SBC on the other. But in our 2005 survey—conducted during February and early March of 2005—the spread between the Baby Bells and the long distance carriers has disappeared.

"Rates fall when there is competitive pressure—and they go up in its absence," said CA's Linda Sherry, editorial director and researcher for the survey. "We fear that the mergers now re-shaping the industry will result in even higher telephone rates than we found this year. By next year's survey, AT&T and MCI may be absorbed by SBC and Verizon respectively. Telecommunications will be dominated by two new Mama Bells, leaving consumers with virtually no choice of carriers."

Calling basket increases

CA's long distance calling basket includes 126 minutes of basic rate calls in all rate periods. The totals for AT&T, MCI, SBC, Sprint and Verizon jumped from $109.83 in 2000, after SBC and Verizon (then Bell Atlantic) started to compete in the long distance market, to $182.02 today—an increase of 66%. (For companies with a basic rate monthly fee, the fee is always included in the calling basket total.)

In 2004, CA found that the rates charged by SBC and Verizon remained significantly lower than those of AT&T, MCI and Sprint. But this year's data reveals that SBC and Verizon rates have increased sharply. Verizon's calling basket has climbed 20% in one year to become the second highest in the group of five, with a total of $37.80. In 2000, Verizon charged $12.60 for the calls.

SBC's rates rose a staggering 24% in one year, with its calling basket total jumping from $25.62 to $31.92. In 2000, SBC charged $11.34 to carry the calls. (Click here for the Calling Basket chart.)

CA's study also found new miscellaneous charges and much higher rates on directory assistance, collect calls and calling cards.

Basic Rate "Calling Basket"
Company 2004 2005 Difference
AT&T $38.81 $33.35 Down 14%
MCI $40.70 $35.45 Down 12.8%
SBC $25.62 $31.92 Up 24%
Sprint $39.90 $43.50 Up 9%
Verizon $31.50 $37.80 Up 20%
All calls, call carriers $176.53 $182.02 Up 3.1%

"Miscellaneous" fees

Miscellaneous fees have exploded, with large telecommunications companies adding a dizzying array of monthly charges. "The bigger carriers never met a fee they didn't like," said Sherry, giving the following examples found by CA:

  • Local bill charge (for customers who have their long distance charges combined with their local phone company bill): AT&T, $2.49; MCI, $3.99 and Sprint, $1.50.

  • Carrier cost recovery charge: Bell South, MCI and Sprint, 99¢. According to the BellSouth web site, this fee is charged to "recover certain costs associated with state-to-state access charges, expenses associated with regulatory proceedings and compliance, and billing expenses."

  • Regulatory assessment fee: AT&T, 99¢. (As of April 1, this fee will be increased to $1.49.)

  • Regulatory service fee: SBC, 0.15%.

  • Regulatory recovery fee: Vonage, $1.50.

  • Interstate services fee: Qwest, 99¢.

  • Property tax surcharge: MCI, 2.30%.

  • Network access charge: MCI, $6.50.

  • Universal service fee: Long distance carriers are passing along the 10.70% fee they pay for supporting telecommunications services in rural and high cost areas and for ensuring that schools, libraries and health care facilities have access to the Internet.

  • In-state access service charge: Sprint, $1.99.

  • Federal access charge: Qwest, $4.78-$6.50.

    Consumers face fewer choices and higher rates in the telecommunications marketplace.


Interstate rates for customers with no calling plan
Company Fee Flat rate Weekday Weekday evening/night Weekend
AT&T $3.95 n/a 35¢ 30¢
BellSouth None 18¢ n/a n/a n/a
Cox None 10¢ n/a n/a n/a
MCI $3.95 n/a 35¢ 35¢
Qwest None 30¢ n/a n/a n/a
SBC None n/a 32¢ 22¢ Same as weekdays
Sprint $3.95 n/a 39¢-44¢* 27¢-43¢* 17¢-24¢*
Verizon None 30¢ n/a n/a n/a
Flat rate 24/7: Always the same rate regardless of day or time; n/a means not applicable.
*Rates vary by mileage.

Calling card calls

The cost of placing a 10-minute weekday, daytime calling card call from Chicago to Los Angeles, using each company's own card and access number, jumped since last year. SBC led the pack with a 40% increase, from $4.25 last year to $5.95 in 2005. AT&T's cost went from $10.15 in 2004 to $13 this year, an increase of 28%. MCI's charge increased to $14.25 from $11.40—a 25% increase.

If the call is placed at a payphone, a per-call payphone surcharge is added to the total cost of the call. CA found a range of payphone surcharges of 24¢ (Verizon) to 65¢ (BellSouth).

Click here for the Calling Card chart.

Collect calls

The cost of a 10-minute, daytime collect call from Chicago to Los Angeles, dialed using toll-free collect call access numbers, also increased sharply. MCI's rates jumped from $12.89 last year to $16.49—a whopping 27.9% increase. Rates charged by AT&T and Sprint moved in lock step, from $12.89 in 2004 to $14.89 in 2005—a 15.5% increase.

The cost for this collect call when you ask the operator to help is even higher. AT&T increased the cost for operator-assisted collect calls 12.9% in one year, from $15.40 to $17.40. MCI raised its rate 9.4%, from $16.44 to $17.99. Sprint's charge increased from $14.40 to $15.40, a 6.9% increase.

Click here for the Collect Card chart.

Directory assistance

The cost of asking for directory assistance by dialing the area code plus 555-1212 increased in the past year for MCI and SBC customers. MCI customers now pay $3.49, a 40% increase from last year's $2.49. At SBC the charge has increased to $2.49 from $1.40, an increase of 77%.

See below for the Directory Assistance Chart.

Information, please: Directory assistance rates

This chart shows the charges callers pay when they dial Area Code + 555-1212. The bottom row is the charge to connect the call automatically. This charge is added to the actual cost of the call.

AT&T Bell-South Cox MCI Qwest SBC Sprint Verizon
$1.99 $1.80 29¢-$1.50* $3.49 $1.15 $2.49 $2.49 $1.25
50¢ 45¢ N/A 35¢ 26¢ 50¢ $1.00 50¢

Consumer Action's 2005 survey of calling plans

This year Consumer Action (CA) looked at 46 long distance calling plans from 22 companies and found some new options for "Voice over Internet Protocol" (VoIP) calling plans, which package voice calls as data and send them across the Internet.

In 2000, CA added the first sizeable consumer VoIP company, Net2Phone, to its survey. It took until 2004 for robust competition to enter the field, with AT&T's CallVantage and Vonage broadband phone service. To use VoIP, you must have high-speed Internet access, which is not included in the price of the VoIP service. (See "VoIP tips" below.)

This year CA found six residential VoIP plans from AT&T, Net2Phone and Vonage. All companies offer "unlimited" VoIP calling plans, with AT&T and Net2Phone charging $29.99 per month and Vonage $24.99. Lower priced plans offering 500 minutes of calls per month are offered by Net2Phone and Vonage.

Long distance plans

The 46 long distance calling plans examined by CA include eight without fees or minimums; 12 with fees or minimums; six plans that require online sign-up or credit card billing; eight "buckets of minutes" plans; four unlimited plans and two prepaid long distance plans. (In estimating your costs, remember that significant surcharges and taxes will be added to your bill.)

On the calling plans without fees or minimums, the average rate is 10.6¢ per minute. On plans with fees or minimums, the average rate is 6.2¢ without the fees or minimums factored in. The average monthly fee is $4.74 and the average monthly minimum is $9.50.

CA found a majority of flat rate plans offering one per-minute rate. Just a couple of two-rate plans were found—with such plans a higher per-minute rate applies in the daytime and a lower rate in the evening, at night and on weekends.

"Buckets of minutes"plans give you a certain number of minutes per month for one charge. When you use more than your allowance of minutes, a slightly higher per-minute rate applies for additional minutes. If you don't use all the minutes in one month, you lose them—unused minutes don't roll over.

Prepaid plans are a favorite category because of the enormous savings that are possible for a small sacrifice in convenience. The two plans surveyed require that customers pay in advance for long distance minutes using a credit or debit card. Neither plan has per-call connection fees or monthly charges and minutes roll over from month to month, unlike buckets of minutes plans.

CA's entire interstate calling basket of 126 minutes would cost only $3.65 compared to $31 or more, using one of the surveyed prepaid plans, said Linda Sherry of Consumer Action, noting that prepaid plans also allow you to track your balance and calls online.

"Unlimited" plans let you make any number of calls in return for a set monthly fee. "These are popular but very expensive unless you are a heavy long distance user," said Sherry.

Average users of long distance who talk for about 200 minutes per month might pay up to 24¢ per minute because minutes would go to waste.

Calling card savings

CA used its calling basket of 126 minutes to compare how much consumers could save by having a calling plan. Customers of AT&T, BellSouth, Cox Communications, Qwest, SBC, MCI, Sprint and Verizon could save up to 68% off basic default long distance rates if they choose a calling plan—even when monthly recurring charges are figured in.

At the bottom end of possible savings on CA's calling basket, Cox Communication's basic rates are only 4% more expensive than its "Simply Five" 5¢ flat rate plan, which comes with a $4.95 monthly fee. However, Verizon long distance customers can save 68% by choosing its e-Values plan with a monthly fee of $1.50, which provides rates of 10¢ per minute on weekdays and 5¢ on weekends.

Interstate Long Distance Plans 2005

Click here for information on how to contact the companies listed.

Company Calling Plan Monthly Fee Per Minute
  ------------- Plans without fees or minimums -------
AT&T OneRate Simple Plan None 29¢
Cox Communications (Default plan) None 10¢
Cox Communications Simply Three Promotion None
ECG Current Rate None 2.7¢
Everdial 4.9¢ Long Distance None 4.9¢
Express Tel/TelAmerica Residential Plus None 11.5¢
Express Tel/TelAmerica Ninefold None
Qwest 15 Cent Single Rate None 15¢
SBC Just Call Standar None 10¢
  ------------------ Plans with fees or minimums ------------------
AT&T OneRate 7¢ Plus $3.95
AT&T OneRate 10¢ Plus $9 (min.) 10¢
BellSouth Nickel Plan $4.95
BellSouth Dollar Plan $1.00 10¢
Cox Communications Simply Five $4.95
Excel Nickle Nation $5.00
Excel Dime Deal $3.75 10¢
GE Long Distance Residential Long Distance $10 (min.) 4.5¢
IDT Low Flat Rate $3.95
SBC Just Call 5¢ Standard $5.00
Sprint Nickel Anytime $8.95
Working Assets 2.9¢ Offer $5.95 2.9¢ (5¢ after 1 year)
  ----- Voice over Internet Protocol (VoIP) plans -----
AT&T (VoIP) CallVantage Local Plan $19.99
AT&T (VoIP) CallVantage $29.99 Unlimited
Net2Phone U.S./Canada Plan  $29.99 Unlimited
Net2Phone U.S./Canada 500 Plan $14.99 500 mins/3.9¢
Vonage 500 Anytime $14.99 500 mins/3.9¢
Vonage Premium Unlimited Plan $24.99 Unlimited
  ----- Plans that require online sign-up or credit card billing -----
AT&T 5¢ Nights $9 (min.) 10¢/5¢ evening/night
Global Crossing Exact Rate $1.99
GTC Telecom 2.9¢ Plan $1.95 2.9¢
MCI Net Value $5.99
Verizon e-Values $1.50 10¢/5¢ weekends
ZoneLD ZoneLD None 3.9¢
  ----------------"Buckets of minutes" plans -----------
BellSouth Talk Lite 60 $5.95 Effective rate: 9.9¢
Cox Communications U.S. 250 Savings Plan $15.00 Effective rate: 6¢
Cox Communications U.S. 500 Savings Plan $25.00 Effective rate: 5¢
Excel Simply 500 $19.95 Effective rate: 3.9¢
MCI Nationwide 200 $10.99 Effective rate: 5.5¢
SBC Just Call 200 $10.00 Effective rate: 5¢
Sprint 1000 Anytime $40.00 Effective rate: 4¢
Verizon TalkTime 30 $3.00 Effective rate: 10¢
  ------------------ "Unlimited" plans ----------------------
AT&T Unlimited Plus $29.95 Unlimited
BellSouth Basic Unlimited Plan $29.99 Unlimited
Cox Communications Unlimited Connections $25-$49.95 Unlimited
Qwest Choice (No longer available.) $20.00 Unlimited
  --------------------- Prepaid plans -------------------------
OneSuite Prepaid Long Distance None 2.9¢ (2.5¢, local access)
Tel3Advantage Flex Plan None 2.9¢ (1.9¢, local access)

Calling card calls comparison

This chart compares the cost of making a 10-minute interstate call using the company's calling card and dialing the appropriate company access number without the assistance of an operator. The cost includes a surcharge, which is broken out in the second line. The savings shown is for calls made under the optional calling card plan offered by the company and includes a monthly fee if applicable. Payphone calls are subject to an additional surcharge, shown in the last line.

  AT&T Bell-South Cox MCI
Undiscounted cost $13.00 $5.45 $2.50 $14.25
Surcharge (included) $1.50 95¢ None $1.75
Calling card plan $2.50 AT&T One Rate ($1 monthly fee $3.50 (Rate for BellSouth subscribers.) None available $1.50 ($2 monthly fee)
Savings with plan 73% 35% N/A 75%
Payphone surcharge 60¢ 65¢ 52¢ 55¢

  Qwest SBC Sprint Verizon
Undiscounted cost $8.15 $5.95 $10.15 $5.00
Surcharge (included) $1.25 95¢ $1.25 None
Calling card plan $7.90 (No per call surcharge option) $1.50 Value Card Plus Plan ($1 monthly fee) $1.50 ($2 monthly fee) $1.50 Away From Home Plus ($3 monthly fee)
Savings with plan 3% 57% 65% 10%
Payphone surcharge 25¢-55¢ 47¢ 55¢ 24¢

Collect call costs

This chart shows the cost of making a 10-minute daytime collect call from Chicago to Los Angeles using each company's toll-free access number.

AT&T $17.40
BellSouth $10.40
Cox $4.50*
MCI $17.99
Qwest $17.40
SBC $13.85
Sprint $20.39
Verizon $16.88
*This call can only be made with the help of an operator.

VoIP tips
Extra charges are common for Internet phone service

Voice over Internet protocol (VoIP) calls can save you a lot of money if you have a computer and access to a high-speed Internet service such as DSL or cable modem. To learn the true charge, factor in the cost of the high-speed Internet connection as well as the VoIP plan fee.

Here are some questions to ask when shopping for VoIP service:

What is included in the monthly flat fee?
Ask about the types of calls are covered by the plan—local, regional toll, in-state long distance and international.

What fees, taxes and surcharges will be added to my bill?
You will probably pay federal excise tax (3%) as well as fees charged by the provider, such as a "regulatory recovery fee." These could add 9% or more to the cost of your service.

What are your contract and cancellation policies?
Some companies have a short time frame in which your service is subject to a money-back guarantee, but make sure you understand the details or you could be left with some costs if you cancel. Most services require you to keep the service for a year or more.

Are there activation fees?
The carriers listed in Consumer Action's survey all charge activation fees of about $30.

What devices do I need to use your service and what, if any, is the cost?
You will need a computer and an Internet telephone adapter to connect to your broadband modem or router. Some companies charge you for the adapter.

Are there any shipping charges?
Ask about the cost of "shipping and handling" for your phone adapter. These charges can add considerably to your starting cost.

Are calls to cell phones included?
Unlimited plans rarely include calls to cell phones overseas. These calls are charged at a separate per-minute rate. It can be difficult to know if you are calling a cell phone, but it pays to find out because rates to overseas cell phones are significantly higher than rates to overseas landlines.

Eye-opening savings on international calls

Consumer Action (CA) found that it's possible to realize great savings on calls overseas by subscribing to an international calling plan. CA compared a 10-minute sample call to six countries and found that callers can save between 84% and 98% with an international plan.

The survey highlights international calling plans available from AT&T, BellSouth, Cox Communications, MCI, Qwest, SBC, Sprint and Verizon in a chart on this page. The other chart on this page compares rates charged by these companies during their lowest "off peak"(economy) time periods on calls to six counties: Australia, Brazil, Canada, England, Mexico (Mexico City) and Taiwan.

The greatest savings found is on a 10-minute call carried by MCI to Taiwan. At the default rate, the call costs $44.79. With MCI's Global Connections plan, the call is 70¢. Even when the Global Connections $4 monthly fee is added to the calculation, MCI subscribers would get a 89.5% discount on the one call.

The smallest savings—84%—was on a call carried by Qwest to Brazil. Without an international calling plan, the call costs $9.48; with the company's "Choice International" plan it costs $1.50. Even adding the $4 monthly fee, Qwest customers who subscribe to the international plan would save 42% on the one call.

Calling cell phones

Consumer Action warns overseas callers that most carriers have higher rates for calls to cell phones overseas, which could double—even triple—the cost of these calls. If you are calling a cell phone, make sure you are aware of any "international mobile termination" charges.

Linda Sherry of CA, who conducted the survey, noted that most people believe that when they call a cell phone, the cell phone's owner pays for the call. "On overseas calls, this can be a costly trap." She recommended checking your carrier's web site for rate variances and to figure out in advance if you are calling a cell phone.

International calling plan per-minute rates to sample countries

  AT&T BellSouth Cox MCI
Plan name and monthly fee AT&T AnyHour Advantage $3.95 BellSouth International Advantage at Home $2.95 International Savings Plan $3.95 MCI Global Connections $4.00
Montreal, Canada
Mexico City, Mexico 10¢ 10¢ 25¢ 15¢
Rio di Janeiro, Brazil 14¢ 14¢ 14¢ 15¢
Taipei, Taiwan
London, England
Sydney, Australia 10¢ 12¢ 12¢
*10¢ Mexico Plan with $4 monthly fee

  Qwest SBC Sprint Verizon
Plan name and monthly fee Qwest Choice International Rates $4.00 Just Call Worldwide Plan $3.99 50 at Home with International Savings $3 International Choice Plan with City Rates $4
Montreal, Canada
Mexico City, Mexico 10¢* 10¢ 10¢
Rio di Janeiro, Brazil 15¢ 14¢ 19¢ 14¢
Taipei, Taiwan 10¢
London, England
Sydney, Australia 12¢ 10¢

Compare savings on international calls

This chart illustrates how international calling plans can provide big savings off default rates — even during the cheapest calling periods. The first row for each carrier is the cost of a 10-minute call when calculated using each company's off-peak international rates to the specified country. The second row is the cost of the call when using a discount international calling plan from the same carrier. (All plans have monthly recurring charges.)

  Canada Mexico Brazil Taiwan England Australia
AT&T $7.50
BellSouth $5.70
Cox $3.70
MCI $14.90
Qwest $2.00-





SBC $7.20
Sprint $6.30-





Verizon $7.80
* Mileage-banded rates

Dropping the landline

With reports of many people, especially the younger set, using their cell phones instead of a local landline connection, Consumer Action (CA) looked at nationwide plans offered by the three biggest wireless carriers and found that it can be a cost-effective choice under certain circumstances.

It wasn't possible to directly compare the same "bucket of minutes" from wireless giants Cingular, Sprint and Verizon because Sprint did not offer a plan with 900 “anytime” minutes. In an attempt to split the difference, CA looked at two Sprint buckets of 700 and 1,100 minutes and averaged the difference between the two plans' per minute rates at 6.5¢ per minute.

"It's striking that the average per minute rates in these sized plans are so close at 6.5¢-6.6¢ per minute," said CA's surveyor Linda Sherry. "The cell phone rates are a better deal than the 6.2¢ averages we found for fee-based landline long distance plans, because that average price does not include the fees or minimums you pay with the long distance plans."

In dropping the landline, you'd save the monthly charge for residential local phone service, but you would use up your cell phone's anytime minutes when you placed local calls during peak hours.

Another downside is that when the anytime plan minutes run out, charges for peak minutes can be 40¢ per minute or higher. One of the companies, Cingular, allows unused plan minutes to —roll over— from month-to-month. Sprint offers a "Fair and Flexible Plan" in which customers can elect to add blocks of time at a discounted rate if they are going to run out of minutes within a month.

CA also notes that with a cell phone you get some services for free that would cost extra for a landline, such as voice mail and caller identification.

The nationwide plans today offer minutes that can be used on local or long distance calls as long as customers are within their cell phone company's coverage areas.

In addition, the cell plans offer free calls to other customers of the same company and, for an additional monthly charge, allow households with more than one cell phone to share the plan minutes in an arrangement known as a "family plan."

Issues to consider

Here are some issues to consider before dropping your landline service:

  • Some houses and apartment buildings do not have good enough cell phone reception to allow you to substitute your cell for a landline. When starting new cell phone service, walk around your home and check the reception in different areas before the trial period is up.

  • In a large residence, you might not be able to hear your cell phone unless you carry it with you from room to room. With landlines, you can have multiple telephone extensions.

  • Your battery will have to be charged often. Many people who use their cell phone as a home phone have two or more batteries to use as a backup. You can also get charging cradles that will keep your cell phone juiced while you're not talking.

  • If you want DSL high-speed Internet service, you will have to have a landline anyway.

Cheaper service

There are ways to save money on landline local phone service, suggests CA. In many areas it's possible to get local "measured rate" service which can cost less than flat rate service if you don't make a lot of local calls.

For "regional toll calls," which can cost up to 20¢ per minute, inquire about flat rate calling plans. To gauge if a plan is cost effective, check your last bill to see how much you spent on regional toll calls and compare it to the cost using the plan.

At a glance: Comparing nationwide wireless plans
Company What you get
Cingular - Nation 900 with Rollover ($59.99)
6.6¢ per minute if all anytime minutes are used.
900 anytime minutes (15 hours), unlimited night and weekend calls and free calls to other Cingular wireless customers. Night minutes: 9 p.m.-6 a.m. Additional calls are 40¢ per minute. 2-year contract with early termination fee.
Sprint - Fair and Flexible 700 ($50)
7.1¢ per minute if all anytime minutes are used.
700 anytime minutes (about 11 hours) and unlimited night & weekend minutes. Night minutes: 9 p.m.-6 a.m. $5 extra per month to start at 7 p.m. $5 for unlimited free calls to other Sprint wireless customers. 2-year contract with early termination fee.
Sprint - Fair and Flexible 1100 ($65)
5.9¢ per minute if all anytime minutes are used.
1,100 anytime minutes (about 18 hours). Other terms same as above.
Verizon - America's Choice ($59.99)
6.6¢ per minute if all anytime minutes are used.
900 anytime minutes (15 hours), unlimited night/weekend minutes and free calls to other Verizon wireless customers. 40¢ per additional minute. Night minutes: 9 p.m.-6 a.m. 1-year contract has $35 per-line activation fee; 2-year contract has $15 per-line activation fee. Early termination fee applies.
Source : Company web sites, 3/04/05; information is for a Washington, DC-based customer.

'Flat tax' proposal would add costs for vulnerable telephone customers

Consumer Action (CA) is fighting to protect low income consumers by challenging a proposed change by the Federal Communications Commission (FCC) in how it collects Universal Service Fund (USF) fees on telephone bills.

The USF was established by the federal government to subsidize phone service in low income communities, as well as in rural areas where the cost of providing service is high and to provide support for schools and libraries.

Under current policy, USF fees are collected from long distance callers based on the amount of long distance they use. New proposals would charge a flat fee to each phone number or a 50-50 combination of a flat phone number fee and percentage of use fee. CA has joined many consumer and civil rights groups in the—Keep USF Fair Coalition” to publicize the potential negative impact of the change on low volume users, who often include seniors and the poor.

"A shift in USF collection would disproportionately hit low income residential and low volume long distance users," said Dirck Hargraves, counsel for the Telecommunications Research and Action Center (www.trac.org), a coalition member based in Washington, DC. "With a flat monthly connection charge, residential customers would be exposed to an unfair cost increase."
For more information, visit Keep USF Fair (www.keepusffair.org).

How to contact the companies in our survey

This list is being published as a service to consumers who wish to contact one or more of the companies listed in Consumer Action's 2005 Telephone Rates Survey.


Cox Communications




Express Tel/TelAmerica
www.telamerica.com; www.expresstel.com

Global Crossing

GE Residential Long Distance

GTC Telecom











Working Assets




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