Investors Whine As T-Mobile Finally Forces Verizon Wireless To (GASP) Compete On Price
from the boo-hoo dept
For several years now, Verizon Wireless has tried to make the argument that they don't have to compete on price because their network is just that fantastically awesome. The position wasn't entirely unsupportable, given that Verizon Wireless tops most customer satisfaction studies, has the largest LTE network, and hadn't to this point been seeing many customer defections. The result has been some of the highest wireless prices (and profits) in the industry, with Verizon getting away with offering the occasional, cosmetic promotional offer. The problem for Verizon is that real price competition (a rarity in U.S. telecom markets) isn't something you get to just wish away (at least not without some form of potent voodoo).Enter T-Mobile, which in recent months has been a rare disruptive force in the market, working to eliminate long-term contracts and ETFs, while slashing prices and embracing a number of new, pro-consumer policies (like free international data when roaming overseas) that heretofore had been quite foreign for a largely duopoly-controlled industry. T-Mobile's shenanigans have resulted in investors whining for months about the possibility of Verizon and AT&T *GASP* actually having to compete on price, as this recent, unintentionally-hilarious Reuters report illustrates:
"The most disappointing thing is that AT&T is reacting to T-Mobile," said Jefferies analyst Michael McCormack. "How long is it before Verizon reacts?"...McCormack (is) worried about the implication that industry revenue could be cut by $20 billion. "That's clearly not a healthy sign."Yes, how disappointing and unhealthy that a government-pampered duopoly has to suddenly compete on price, eroding artificially-inflated revenues resulting in better, cheaper service for everyone! McCormack's hellish, truly-Lovecraftian fears came true this week, as Verizon finally buckled to T-Mobile pressure and started competing more seriously on price. The company began offering loyalty discounts to existing customers, and unveiled a suite of new data options that boost data allotments for many users. While still not in range of T-Mobile's pricing, it's a start of something more closely resembling real competition in the wireless space.
The horror. The horror.
Thank you for reading this Techdirt post. With so many things competing for everyone’s attention these days, we really appreciate you giving us your time. We work hard every day to put quality content out there for our community.
Techdirt is one of the few remaining truly independent media outlets. We do not have a giant corporation behind us, and we rely heavily on our community to support us, in an age when advertisers are increasingly uninterested in sponsoring small, independent sites — especially a site like ours that is unwilling to pull punches in its reporting and analysis.
While other websites have resorted to paywalls, registration requirements, and increasingly annoying/intrusive advertising, we have always kept Techdirt open and available to anyone. But in order to continue doing so, we need your support. We offer a variety of ways for our readers to support us, from direct donations to special subscriptions and cool merchandise — and every little bit helps. Thank you.
–The Techdirt Team
Filed Under: broadband, lte, wireless
Companies: at&t, t-mobile, verizon
Reader Comments
The First Word
“Subscribe: RSS
View by: Time | Thread
[ link to this | view in chronology ]
Response to: That One Guy on Feb 18th, 2014 @ 3:56pm
[ link to this | view in chronology ]
Re: Response to: That One Guy on Feb 18th, 2014 @ 3:56pm
[ link to this | view in chronology ]
[ link to this | view in chronology ]
Re:
[ link to this | view in chronology ]
Re:
/sarc
[ link to this | view in chronology ]
Re: Re:
I hate government overreach as much as anyone else does, but I also hate it when they don't do their job by protecting the weak from the strong and consumers from being gouged and conned, etc.
[ link to this | view in chronology ]
Re: Re: Re:
[ link to this | view in chronology ]
This Bud's for you Karl! :beer:
[ link to this | view in chronology ]
Re:
[ link to this | view in chronology ]
"Industry Revenue"
I just switched from Verizon to T-Mobile in December, for almost full disclosure except for my relative anonymity.
[ link to this | view in chronology ]
Re: "Industry Revenue"
[ link to this | view in chronology ]
[ link to this | view in chronology ]
[ link to this | view in chronology ]
Re:
[ link to this | view in chronology ]
Re: switch hitter!
On the data front, here's what T-Mobile does. You have unlimited bandwidth. After you reach a limit, they throttle you down to lower speeds. If you need more than 500mb per month of high speed data (the default) you can get an additional 2gb for $10 a month. When you get the additional bandwidth, they enable tethering at no additional charge.
I paid over $500 to be shut of Sprint. It's the best $500 I have ever spent!
[ link to this | view in chronology ]
Still a ripoff...
[ link to this | view in chronology ]
Re: Still a ripoff...
[ link to this | view in chronology ]
[ link to this | view in chronology ]
[ link to this | view in chronology ]
Don't you worry.
[ link to this | view in chronology ]
Too little too late
Also pleased as the dickens that I can just grab any unlocked phone and sell off my previous model anytime I like.
[ link to this | view in chronology ]
I just wrote Verizon about being a ripoff
I sent this letter to Verizon yesterday. I am wondering if they will respond. I doubt it.
Dear Verizon,
I am considering canceling my FIOS service because you raised the price beyond the point I'm willing to pay.
The service has been excellent, the speeds are consistent and good and I have enjoyed FIOS a lot. It is simply a decision based solely on value. I am simply not willing to spend $52.99/month for Internet. I feel like you take me for granted because every few years you keep raising the price, but not the value to me.
I called you several times to negotiate a better rate. I also tried to sign up for $19.99/month DSL. None of these options are available to me. My only option is to leave you completely and go to your competitor, RCN. They are willing to give me faster service for only $29.99/month for the first year, and $39.99 next year. At that point, I will try to negotiate a better deal or I may come back to Verizon if you offer a tier of service at a price point I'm willing to pay.
You offer no lower tiers of service. I would be fine with 5 mbps, but you do not offer it. My needs are very modest. You understand this, but people have been more than willing to cede to your demands. I predict more and more of us will drop out as you remove options and continue to raise your rates above the value you offer.
Please take no offense, but an Internet connection is a basic commodity now. All I ask for is a simple RJ45 connection and 5 mbps of bandwidth. Paying more than $20/month is paying too much. At this point, I do not want TV, phone, email, hosting, a router, software, or anything. However, consider this; losing me as a customer means if I decide to subscribe to phone or TV, I'm more likely to go with RCN since I will have their cable active. If I ever need more bandwidth or services, I will use the provider who gives me the best value. Right now it is not Verizon. I don't need to tell you that it's cheaper to keep existing customers than it is to get new customers. Once I'm gone, getting me back will cost you more.
Don't worry, I won't be offended when you don't reply, after all it's just business. I know.
[ link to this | view in chronology ]
As a Verizon Wireless customer
[ link to this | view in chronology ]