Posted by: Olga Kharif on February 28, 2008
The move wireless industry has feared just took place. Today, Sprint Nextel announced its “Simply Everything” plan, which, for $100 a month, offers users unlimited access to voice, the Web, e-mail, texting, Sprint TV and other services.
The move is a response to the announcements by Verizon Wireless, AT&T and T-Mobile USA last week of $100-a-month unlimited calling plans. T-Mobile’s plan also included unlimited messaging. But none of these carriers offer as much for $100 as Sprint.
While this is great news for consumers, Sprint’s new plan spells trouble for the wireless industry. Clearly, price competition is on. Now, Verizon, AT&T and T-Mobile will have to offer a lower-priced plan, too. After that, perhaps, one or the other of them will lower prices again, in an attempt to steal others’ customers. The other carriers will follow suit. The likely result: Industry’s revenues and profits will plummet, big time. And Sprint, already struggling financially, may end up struggling even more.