The Wireless War

Verizon Wireless announced today that it is going to offer an unlimited voice plan for $139.99 a month.  This raised the hairs on all the wireless giant’s necks, as all hell broke lose during trading today – sending shares of AT&T, Sprint, and Verizon through the floor – losing 5.6%, 2.6% and 6.2% respectively.

Fears of a pricing war have started to run wild.  Now that a company has decided to break wireless “gentleman’s agreement” – there is no telling how far companies will lower prices to avoid customer deflection.

This aggressive move by Verizon has forced the industry to respond.  This is great for consumers, who will eventually pay less for more.  However, this comes as tragic news for shareholders, because revenues are bound to drop – which will be closely followed by earnings and the stock price…

Cheers,

Jack Aubrey
Senior Equity Analyst, Bourbon & Bayonets