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.

Filed Under: broadband, lte, wireless
Companies: at&t, t-mobile, verizon