Hawaii residents for the first time will be able to use a carrier besides GTE Hawaiian Tel without having to dial an extra five digits.
And as competition heats up, industry officials expect more companies to get into the estimated $125-million-a-year market - and rates to fall even more.
For decades, Hawaiian Tel, as a regulated monopoly, was the only carrier that handled interisland calls.
But early last year AT&T Communications of Hawaii and Long Distance/USA-Sprint were granted permission by the state to offer service on a limited basis. Customers had to dial a special five-digit access code before each call, a cumbersome process that many people shunned.
Starting tomorrow, however, residents can designate AT&T, Sprint or possibly MCI Communications as their interisland carrier - without having to worry about access codes. If customers don't make a choice, service will remain with Hawaiian Tel.
Changing carriers is easy: Call your preferred one or Hawaiian Tel. The first change is free. Subsequent ones will cost consumers more than $4 per change, an expense typically picked up by the new carrier.
Consumers will benefit from the added competition, said Courtney Brown, chairman of the Coalition for Competitive Telecommunications.
"I think rates will continue to go down," he said.
When AT&T and Sprint entered the market in March 1995, rates dropped roughly 25 percent.
No immediate rate changes are planned by AT&T, Sprint and Hawaiian Tel, but the latter already has signaled its desire to lower tolls even more. A Hawaiian Tel rate case is pending before the state Public Utilities Commission.
MCI spokesman Andy Shepard said his company plans to file its rates with the PUC tomorrow and begin offering service the same day, though some industry officials and regulators questioned whether that can happen that quickly.
Eric Tom, general manager of Long Distance/USA-Sprint, foresees more price wars.
"As competition heats up, rates will continue to drop," Tom said.
Tom, however, said he is concerned that some people won't get the word that they can choose carriers and, by default, remain with Hawaiian Tel.
Despite the access-code process, Sprint has been able to capture 4 percent to 5 percent of the interisland market for residents and businesses, Tom said.
AT&T has captured a similar share, said AT&T spokesman George Irion.
The willingness of people to go through the hassle of dialing an access code indicates strong demand for choice, the two executives said.
"I think there's huge pent-up demand for alternatives" to Hawaiian Tel, Irion said, noting AT&T has received thousands of calls from people inquiring about how to make the switch.
Sprint is planning a special promotion to entice people to its side. The carrier is offering three hours of free interisland or mainland domestic long-distance calls for people picking Sprint.
AT&T has no promotion planned.
Hawaiian Tel spokesman Calvin Tadaki said the utility welcomes competition as long as "everyone's playing on a level playing field." The company believes its competitors have an unfair advantage because Hawaiian Tel's interisland rates are artificially high to subsidize local service, he said.
Hawaii is the last state in the country to open its intrastate long-distance market to full competition, industry officials say.
