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Cell Phone Price Wars: The Death of the Landline?

May 12, 2008 by admin.

Cell Phone Price Wars: The Death of the Landline?This is the first of a series of articles outlining the recent unlimited minute offerings cell phone carriers have made and whether or not this will ultimately mean the demise of traditional phone service as we know it.

 

In the past several months, the top 4 major carriers, Verizon, AT&T, T-Mobile and Sprint have either begun offering unlimited minute cell phone plans or reducing the price of their existing plan (Sprint). What does this mean for the customer? Well, it is the first sign that prices will come down and overage charges may be a thing of the past. While Sprint had unlimited service for $199/month and had been testing it in select markets for $119/month, it wasn’t until the top 2 carriers, Verizon and AT&T, announced plans to offer unlimited minutes plans that the war was on. Soon after, T-Mobile joined the fray and Sprint dropped the price on their unlimited plan. Another regional carrier, US Cellular, followed as well. The country’s fifth largest carrier, Alltel, does not yet offer unlimited calling, but with their MyCircle plans, most customers can get virtually unlimited minutes for less money.

 

For those of you living in cities like Tampa, Pittsburgh, San Francisco or Dallas, there are regional carriers such as Cricket and MetroPCS that have been offering unlimited minutes plans for some time. Perhaps it was these companies expansions into new markets such as Las Vegas, Oklahoma City (Cricket), Detroit and Los Angeles (MetroPCS) that prompted Verizon and AT&T to react. Or maybe it was just a natural evolution of the business as companies try to retain customers that are demanding more from their carriers and are less likely to stay loyal if they are unhappy with their service.

 

So how did Cricket and MetroPCS react to the big 4 getting into the unlimited minutes game? They slashed their rates to $50/month and offered more. Here is a rundown of the cell plans offered by each company:

Carrier Price per mo.* Shared Plan Unlimited Text/Pix/Video Unlimited Data Roaming Included? 411 Included? Contract Required?

Of course, while MetroPCS and Cricket are far cheaper than any of the big 4, they are only available in select markets and you cannot roam out of those markets without an extra charge. But if you don’t travel often and you live in these areas, they are a great bargain, especially MetroPCS family plans, which you can get your service for as low as $25 per month for each phone.

 

In the next part of the series, I’ll take a look at how this could potentially affect traditional phone companies and VOIP companies as well.

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