Wireless Price War Finally
Begins!
It is finally upon us – the beginning of a price war among the four major wireless providers. With the saturation of the market place complete – almost everyone has a mobile device – the strategy to increase market share is now shifting to lower pricing. As evidence of things to come, consider the February 19 , 2008 announcement by Verizon Wireless offering unlimited voice calling minutes for $100 per month. AT&T Mobility quickly followed suit and both were one-upped by T-Mobile within hours which threw in unlimited text and picture messaging with its $100 per month unlimited offering. Overshadowing all three was Sprint’s announcement a week later introducing a “Simply Everything” plan for unlimited voice, data, e-mail, text, Web-surfing, TV, music, navigation, Direct Connect and Group Connect for, you guessed it, $100 per month. What is next? Value Sourcing Group agrees with Sprint Nextel President and CEO Dan Hesse when he states “We believe that the battleground going forward will be data”.
In our recent wireless contract negotiations projects with Fortune 500 clients, wireless data devices have become more and more the norm verses the exception for corporate users. Users and applications for Blackberry Enterprise Server and PDAs with Windows Mobile Release 6.0+ are proliferating at an ever increasing rate. We recently negotiated aggressive pricing for data centric rate plans which were viewed as a precursor for more widespread rate reductions across all types of wireless services. How Sprint Nextel’s rivals react to their all you can eat plan will be a strong indicator of what is next to come. Sprint Nextel’s plan compares to $160 at AT&T Mobility or Verizon Wireless for the same services on smart phones. This represents almost a 40% discount. Particularly for our enterprise clients, all wireless carriers will need to compete fiercely for the sophisticated and smart phone device users. We also predict this level of price cut is now, or will soon be available, to all the rate plans. A significant key to obtaining will be to leverage pricing, terms and conditions and new applications to drive to the best overall offer during professionally-lead negotiations. More to follow as we track the wireless carriers pricing policies and deal offers through several in-progress competitive negotiation engagements.