AT&T, Verizon Will ‘Do Nothing’ to Match Sprint, T-Mobile Price Cuts

By Craig Galbraith Comments
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Wireless pricing plans aren’t the easiest to understand, but we do know one thing: They’re getting less expensive and offering more data for your dollar.

T-Mobile this week said it’s quadrupling the amount of data you can get on the company’s Simple Starter plan. Starting Wednesday, Sept. 3, customers on this plan can get up to 2GB of data for $45 per month – compared to 500MB for $40 that they got previously.

The move by T-Mobile is a response to Sprint’s change last week that introduced a $60 unlimited plan. AT&T’s prepaid arm, Cricket, announced it will give a $100 credit to anyone who switches from T-Mobile or its prepaid brand, MetroPCS. But for the most part, AT&T and Verizon have made only minor changes to their plans.

“[T-Mobile’s move] is a fairly minor change in the scheme of things (quadrupling sounds great, but then you realize it’s a starter plan going from 500 MB to 2 GB, probably the baseline that most users need these days), noted Rich Karpinski, principal analyst with 451 Research, commenting specifically on a CNET article. "The truth is, now that Sprint has come down in price to meet T-Mobile, the real question will be how AT&T and Verizon respond. Chances are they do nothing. As we noted in our recent Mobile Data Monetization 2.0 report, the best moves in the current environment are not price-related anyway, but rather to leverage additional network capacity to boost tier levels as T-Mobile is doing here. The real challenge will be for operators to find new and true points of differentiation moving forward. Plan tweaks and delivering costly but limited-time promotional offers can always be matched.

Karpinski says the real future in wireless is in a number of different areas.

“We haven’t seen the next big thing yet from U.S. operators. Some opportunities include: more aggressive support for video-consumption-on-the-go; a major push behind mid-level phone price points to help keep financing subscribers' actual monthly costs low; and a truly comprehensive connected devices/connected wearables strategy that adds value to this important emerging category," Karpinski added.

Follow senior online managing editor @Craig_Galbraith on Twitter.

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