Frontier Corp., a Rochester, N.Y., vendor, this week introduced a bundle of services aimed at institutions that spend $3,000 to $50,000 a month on telecommunications.
Most of the small to midsize banks that Frontier is targeting (56%) use a combination of at least five services: dedicated lines, wireless, toll- free, Internet, and voice mail.
Frontier's Transaction offering lets users have access to frame relay (where available); a virtual private network; Internet services, including Web-hosting applications; and a software package, Expressview, to track call activity and measure the effectiveness of advertising campaigns.
Some of these services could replace the private-line networks that many banks use today to carry voice and data.
For transmitting data, such as information on automated teller machines or account transactions, frame relay could be an effective alternative to private lines, the company said. "We would recommend frame relay when data of varying bandwidth are being transmitted between two or more places," said Anthony J. Palma, vice president of market management.
For transmitting voice, customers with heavy traffic between a fixed number of sites could find the virtual private network more effective than private lines, Frontier said.
"By offering a frame relay data network for transactions, a voice network, and an Internet network, Frontier is offering a full service that is well packaged for the financial services industry," said Dan Taylor, managing director of telecommunications at the Aberdeen Group in Boston.
This is a good approach, Mr. Taylor added, because users are not going to a new technology type and using frame relay can reduce costs.
Frontier is building a network, called Optronics, that would combine voice, data, and video and would be compatible with Internet protocols. Currently being deployed over 13,000 miles, it is expected to be complete by early 1999.
In Optronics, Frontier has a network that is as competitive as any offered by MCI, AT&T, or Sprint, said Mr. Taylor. "You're either with the pack or behind it," he said. "Frontier does a good job because it's a facilities-based vendor," rather than a reseller.
With $2.4 billion of revenues, Frontier is the fifth-largest long- distance and the 10th-largest local phone company in the country. It has 5,000 financial institutions as customers, said Sheila M. Marcello, marketing manager of vertical markets. These include M&T Bank, Chase Manhattan Corp., Citicorp, and Marine Midland Bank, a subsidiary of HSBC Holdings PLC.
With its Transaction package, Frontier is targeting smaller institutions. "We can afford to focus on that segment because it's key to our strategy," said Mr. Palma.
In research it commissioned this spring of more than 825 telecommunications decision-makers, Frontier found that the average small to midsize financial firm spent nearly $8,200 on long-distance, local, and wireless communications per month. That includes about $5,000 on long distance, about $2,600 on local service, and about $600 on wireless.
Frontier officials said the cost of Transaction would vary according to the lengths of contracts signed and levels of use.
