International Toll-Free Numbers Boost US Firms' Foreign Business

Communications News,  August, 1984  

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US companies simply have to export more aggressively if this country's yawning trade deficit is to be closed and if they're serious about maintaining or recapturing leadership in world markets. That's the general opinion of m any, including Yonna Cherkosky. She's vice president of the New Yoek City offices of Service 800, a Swiss-based international telecommunications firm that offers a unique international tol6-free service.

"To get into exporting in a big way," says Cherkosky, "the learning curve for American business is steep. While most American business people are all in favor of expanding international trade, promoting free markets and taking valiant stands against protectionism, barely a handful of them are actually explliting foreign markets themselves. Eighty percent of all US exports are accounted for by just one percent of American companies. Fortunately, the greatest obstacles to progress are psychological rather than structural."

She points out that "in some industries, competition has heated up to the point where US companies find they can no longer compete with foreign imports unless they cut costs by out-sourcing or moving production overseas to cheal labor markets. But while moving factories and production out of the US may help individual companies under certain conditions, the outflow of capital cuts the nation's tax base and causes, at best, short-term local unemployment. Perhaps what needs to be done before many more corporations take the radical step of shifting to offshore production, is to consider the proposition of expanding revenues by increasing sales to foreign markets, instead of moving operations abroad to defend an eroding share of the American market." Remington Shaves Losses

As a case in point, she cites Remington Products of Bridgeport, Connecticut. "This electric-shaver maker, best known for its charismatic chairman, Victor Kiam (the man who liked the shaver so much, he bought the company), shut its foreign plants in 1979, concentrating production in the high-labor-cost US. By instituting rigorous quality controls, profit sharing and an agenda for aggressive exporting, the company doubled its US market share, tripled its total sales and now exports one-third of its annual sales of Remington shavers to 32 countries. This dramatic recovery was accomplished in less than five years and during a severe recession."

Many companies, of course, already know a market exists for them somewhere in Europe or Asia, but the capital to establish offices and hire staff to get going just isn't available. Obviously, it would be helpful to be able to do business in forign cities without having to have a physicasl presence there. Enter an international version of the domestic 800 toll-free phone number.

According to Yonna Cherkosky, "In a high-tech age of teleconferencing and instantaneous communications over enormous distances, toll-free telephone numbers that cross national borders seem like a relatively primitive development. Yet only three countries in the world currently have even nationwide domestic toll-free systems--Australia, Denmark and the United States." Working for Compatibility

She explains that "the establishment of an international toll-free telephone network has been blocked until recently by the incompatibility of the numerous national telephone networks. In Europe, for example, the PTTs are national agencies, each one using equipment of varying sophistication and capability. A Pan-European toll-free system that would work like the one we have in the US--where callers could reach a specific party toll-free by dialing the same telephone number from anywhere on the continent--would require all of the PTTs to be able to interconnect each other and reverse charges without operator assistance.

"In many European countries, placing an international collect or credit-card call requires giving the operator the number you want to reach and the number where you can be rung back when the connection is made. For people on the go or who need to receive or convey information immediately, having to wait for the operator to call back isn't very practical."

Service 800 numbers are local telephone numbers in foreign cities. When prospects or clients dial the local number, the calls are automatically redirected by Service 800 ito the subscriber's office in a neighboring country or on the other side of the world. The caller pays only for the local call, the subscriber is billed for the international part of the call at direct-dial rates.

Service 800 solved the network incompatibility challenge by installing a network of call diverters on the premises of telephone exchangers around the world. Together, these call diverters constitute a point-to-point toll-free system. Although a call using a Service 800 number ends up as an international connection, it begins as a local call. The call diverter accepts the local number and then direct dials the appropriate international number. The charges are reversed without operator assistance, which is important when you're calling from a pay phone, looking to avoid those hotel surcharges on international calls, or simply in a hurry. Also, the diverters are strategically located within the local exchanges, with the help of the telephone authorities, to minimize the likelihood of busy circuits.