We've seen at several WISPA conferneces presentations that basically say new phones / new accounts aren't being sold / created anymore (except for kids growing "into age" of getting a phone). Basically the carriers are just shifting accounts back and forth.
I *think* i heard the gov'mt denied the application of sprint and tmobile to merge, so this should just continue competition (which is good, right?). How will this affect our customers - - who gererally don't like paying data overages anyway at what, $10 a gig? http://finance.yahoo.com/news/verzion--at-t-shares-hit-on-impact-of-price-war-163817626.html Price war, what price war? While Verizon (VZ) and AT&T (T) have labored to maintain the facade that there is no price war in the mobile market, both carriers are warning about increased customer defections and promotional activity. Sure sounds like a price war. Shares of Verizon lost 5% in afternoon trading on Tuesday, while AT&T was down 4%. Among those that initiated the price war, shares of Sprint (S) dropped 3% and T-Mobile's (TMUS) stock price was off 7%. The larger reaction for T-Mobile came amid investor unease about a convertible bond offering that the carrier announced on Monday. The sector's sell-off came as the two leading carriers offered warnings about the fourth quarter. Verizon issued a statement after the market close on Monday noting that the "highly competitive and promotion-filled fourth quarter" was leading to more customers defecting to other carriers. Promotional efforts will put "short-term pressure" on earnings before interest, taxes, depreciation and amortization, Verizon said. AT&T Chief Financial OfficerJohn Stephens, speaking at an investor conference on Tuesday, warned that churn was increasing despite recent price cuts intended to keep pace with the smaller, more aggressive carriers. That could put pressure on AT&T's fourth quarter profit margin, he said, although the margin for the entire year will be at least as high, or higher than, the margin in 2013. "The current environment is impacting churn - in fact, we expect postpaid churn to be higher than it was in the year ago fourth quarter," Stephens said. "At the same time, subscriber growth has been strong all year...and we expect that trend to continue in the fourth quarter." Verizon CFO Fran Shammo, speaking at the same conference, continued to push back against the notion of a price war. The carriers have simply moved away from subsidizing the cost of phones, so they are making up for cuts in monthly service fees with new fees for phones, Shammo said. "Quite honestly, I think social media and press has really built this up as a price war type thing," Shammo said. "But when you step back and you look at what the industry has done we've shifted service revenue to equipment." Analysts across Wall Street weren't buying it, however, as they raced to cut estimates for both big carriers. William Power at Robert W. Baird said he'd be cutting profit estimates for AT&T and downgraded Verizon to neutral from outperform. "We have been cautious on the carriers for some time, with Verizon's negative pre-announcement solidifying our concerns," he wrote. Credit Suisse analyst Joseph Mastrogiovanni cut his estimate for Verizon's fourth-quarter earnings per share by 12% to 72 cents. "We continue to believe that Verizon is more exposed to competition than investors expect," he wrote. Citigroup's Michael Rollins cut earnings per share estimates for Verizon for the fourth quarter and 2015, warning that the industry was suffering not just from price cutting but also greater regulation and slowing overall growth as the market matures. "The national U.S. wireless carriers now face unfavorable conditions in 2015," he wrote. The two larger carriers have been trying to fend off aggressive pricing moves by Sprint's new CEO, Marcelo Claure, and T-Mobile's John Legere. Claure, who took over in August, has promised Sprint would be the leader in price cutting, while Legere's Uncarrier program that started last year has reduced the cost of monthly service, roaming and international calling. Last week, Sprint introduced a new promotion promising it would cut monthly bills in half for customers who switched from other carriers.
