Wireless Goes Unlimited: Implications
Posted by: Olga Kharif on February 19, 2008
It’s a historic day in wireless. Today, Verizon Wireless unveiled its first unlimited calling plan. Within hours, AT&T and T-Mobile USA followed suit.
This is great news for consumers: In effect, wireless in going the way long-distance pricing had gone years ago. Per-minute prices are becoming irrelevant. One carrier’s service looks even more like another’s; comparing service plans will become a lot easier.
For wireless carriers, though, the news isn’t necessarily good. Consider: Today, at Sprint Nextel, $100 buys 2,000 minutes. That’s about 33 hours of talk time a month. And there are several higher-end plans offering more minutes. Starting today, high-end plans at Verizon, AT&T and T-Mobile are out to pasture. As of today, $100 — the unlimited plan’s price — is the most a carrier can charge for voice service. The telcos could also get hurt as wireless-to-wireline substitution skyrockets as well.
On the plus side, many people who’ve purchased cheaper, limited-minuted plans may switch up to unlimited offerings. So the wireless companies may actually end up being better off.
This move also carries huge implications for companies like Leap and MetroPCS, which have long tried to differentiate themselves by offering unlimited calling plans. In one day, they have lost one of their biggest selling points. This could be the last straw to finally push these companies toward a merger.
Another company affected: Sprint. By not matching Verizon's price today, the company has proved, once again, that it doesn't move as fast as the competition. A lack of such an unlimited plan could lead to further subscriber losses.