The wireless telecommunications market is gradually undergoing a shift to family plan pricing within the space as more carriers eliminate the concept of voice and text as part of customers’ plans, which is a dramatic change for the industry that gets about 70% of its revenues from voice and text, says Craig E. Moffett, an Analyst at Sanford C. Bernstein & Co., LLC.
“The carriers faced the technology threat that their low-bandwidth, high-profit services, like voice and text would, be arbitraged by lower-priced data services. So they simply ripped off the Band-Aid and eliminated the concept of voice and text altogether,” he said. “The new plans don’t have voice. In fact, they don’t even acknowledge that voice and text exist. They simply charge for access and voice and text are thrown in for free.”
Moffett sees the shift to family plan pricing favoring Verizon Communications Inc. (VZ). He says the new plans also will make it easier and more affordable for customers to add additional devices to the network, and by doing that, they will make it more advantageous to put all of those devices on the same carrier.
“Verizon made the first move a few weeks ago, and AT&T is still on the sidelines, but probably by the time your article comes out, they will have announced something along the same lines. It will take awhile for those changes to work their way through the market, but that is a profound change to the way the industry works,” he said.
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