Monday, March 14, 2005

Are wireless voice prices stabilizing?

It sure seems like it and, in some cases, it seems like voice prices are going up.  Companies seem to be very similarly priced for buckets of minutes and seem to be competing on value-added offerings like data, picture mail, SMS, and subsidized phones.  In this post, Om Malik points out:

A quick analysis of the current offerings shows that the hostilities have diminished if not completely ceased in the mobile market. First the fourth quarter the discounts and competition was not as severe as one though. Secondly, in the first quarter of 2005 we have a couple of mobile carriers actually raising prices, instead of the usual marketing madness. Cingular upped the ante and raised the entry point for its family plans to $69.99 from $59.99. T-Mobile, the biggest discounter of them all has ended its 1000-anytime minutes and unlimited weekend minutes promotion for $45.99. Mind you this very same package was going for $39.99 a year ago. Verizon Wireless has some discounted family plans but that’s about it.

Why is this happening?  Malik also points out:

US wireless penetration is running at 61% and any future growth is going to come from adding more lines to older phones (family plans) or selling pre-paid phones. Secondly, Americans have become comfortable in yakking on their mobile phones all the time (well you can judge that by looking around you during commute hour - everyone is on the phone!) and its reflected in marginally higher ARPU (Average Revenue Per User) and declining churn rates.

If the companies are no longer competing solely on price, then I will tell you what I tell anyone else -- pick your carrier based on coverage.  If you travel internationally, you probably need a GSM carrier, so choose between T-Mobile and Cingular/ATTWS (although Verizon does offer a CDMA/GSM combo phone and Nextel is supposed to be coming out with a iDEN/GSM combo phone sometime soon, the phone offerings from GSM carriers are much cooler right now than the combo phones).  If you rarely travel outside the US and don't need cell service even if you do travel, you might look at Verizon, Sprint, or Nextel.  Value-added features and phone hardware may be important to you, but I do no recommend picking a carrier that will cause you sacrifice coverage to get better phones or data features (unless either of those things is more important than being able to talk on your phone; note that data services will usually not work if you don't have enough signal to make a voice call).

1 comment:

Anonymous said...

hi, you sad that voice prices are stabilizing and sometimes are going up. do you have datas about it??