Sprint's response could spark mobile price war
Sprint has not yet responded to the recent unlimited calling plans for $99.99//month offered by AT&T, Verizon Wireless and T-Mobile but, when they do, some analysts think they could undercut the competition by up to 40%. As the third largest U.S. wireless provider Sprint is under pressure to at least match these plans, which "increases the potential for an all out pricing war" according to analyst Michael Nelson of the Stanford Group.
However, Sprint will most likely offer a better plan. "They're not going to be competitive if they simply match these prices because their networks are weaker and their brands are not as strong," according to Craig Moffett of Sanford Bernstein. Doing so would start a price war, as the other three would have to respond to remain competitive.
Verizon Wireless, AT&T and T-Mobile all saw drops in their stock prices after announcing the new plans. If there is a price war further drops would surely ensue. In addition, these unlimited plans may prompt many customers to get rid of their land lines altogether, a move that would further hurt the carriers.
[via eWeek.com]
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