Under U.S. pressure, long-distance carriers cut prices for calls from Saudi Arabia

WASHINGTON — WASHINGTON -- Under pressure from federal regulators, long-distance telephone companies are cutting their prices for calls from Saudi Arabia to the United States.

Local telephone companies, which handle most long-distance billing, have assured regulators that they will offer flexible payment terms to people with big bills for calls to and from the Persian Gulf.


The changes were approved after a growing number of military families began expressing alarm over phone bills that had begun running as high as $400 a month.

Officials of the Federal Communications Commission said they began meeting with carriers two weeks ago to discuss the problem.


The commission issued a "Consumer Alert" yesterday telling customers about ways they can prevent their telephones from being disconnected if their bills become unmanageable.

American Telephone & Telegraph Co. said that it would cut its price for calls to the United States from its newly installed phone centers in the Saudi desert by about 30 percent.

The company said the price of a 10-minute call made with a credit card would drop from $16.04 to $11.50, effective today. The phone centers house about 1,200 phones linked by satellite to telephone operators in the United States.

AT&T;'s move follows a price reduction last week by MCI Communications Corp., which provides satellite links for about 350 phones in the desert. MCI lowered the price of a 10-minute credit card call from $16.04 to $14.84.

But the biggest complaint about calls to and from the Persian Gulf, involving a Saudi fee, remains unresolved.

Most servicemen are making calls from phones linked directly to satellites, and the Saudi government is charging 73 cents per minute for all satellite-linked calls into and out of the country.

The fee, a product of international agreements, is intended to cover the use of switching equipment operated by the Saudis. But such equipment is generally not used for calls made by military personnel.

Officials at AT&T; and MCI said that they have been negotiating with Saudi officials for relief but that they have not yet reached agreement.


MCI and AT&T; have been relaying more than 25,000 calls a day from roughly 1,500 phones at the calling centers they have set up in Saudi Arabia in the last few weeks.