Though the impact might be quite overblown, at least some investment analysts think the recent adoption of unlimited calling plans by three of the four largest U.S. mobile providers is going to hammer their revenues.
Credit Suisse telecom analyst Christopher Larsen, for example, has reduced his rating on at&t, Verizon, Qwest and Sprint Nextel.
He worries that unlimited calling plans will trigger “a wireless price war.”
UBS telecom analyst John Hodulik thinks the potential impact will affect Verizon and at&t, at least at this point.
Hodulik says Sprint is likely to launch an unlimited voice plan in the next few weeks is considering pricing at $60-$80 a month. If Sprint gets traction, that logically would compel Verizon and at&t to reduce their prices to match.
I am not so sure about that. Each of the carriers might see some lost "overage" revenue from heavy users. But each should gain some customers who upgrade from lower-priced plans, as well as some customers upgrading because they are substituting wireless for wireline service.
It is possible higher subscription revenue will compensate for the loss of "overage" revenue.
Wednesday, February 20, 2008
Mobile Price War Impact?
Gary Kim has been a digital infra analyst and journalist for more than 30 years, covering the business impact of technology, pre- and post-internet. He sees a similar evolution coming with AI. General-purpose technologies do not come along very often, but when they do, they change life, economies and industries.
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