Sprint Nextel's stock dropped yesterday amid concerns that recent pricing moves by Verizon Wireless and AT&T Mobility could put increased pressure on the company. However, the carrier sought to point out that even after the price cuts by AT&T and Verizon it still offers a better value.
On Friday, both Verizon and AT&T made changes to their unlimited calling plans. Verizon lowered its unlimited talk plan to $69.99 per month, and unlimited talk and text to $89.99 per month. Its unlimited data plan remained unchanged at $29.99 per month. AT&T said feature phone users can get unlimited talk for $69.99 per month, quick messaging device customers (those who own devices that do have Qwerty keyboards but are not smartphones) can get unlimited talk and text for $89.99 per month and all smartphone users, including iPhone users, can get unlimited voice and data (but not messaging) for $99.99.
Analysts said the new pricing wouldn't disrupt Sprint too much, but some voiced their concerns.
"In retrospect, Sprint had it easy in 2009," Bernstein analyst Craig Moffett wrote in a research note that announced his rating reduction on Sprint. "In prepaid, they had the luxury of a small starting subscriber base, making net growth easy even at high churn rates. In postpaid, they enjoyed something of a price umbrella; neither Verizon nor AT&T moved aggressively on postpaid pricing in 2009. Now, new pricing plans announced by Verizon and AT&T on Friday in postpaid, and by MetroPCS in prepaid, tighten a vise that leaves Sprint once again stuck in the middle."
Sprint sought to beat back concerns that it was under pressure. The company put out a press release pointing out that its Simply Everything plan, which offers unlimited voice, texting and data for $99.99 per month, is still $20 cheaper per month than a comparable Verizon plan.
"Clearly, even with our competitors' price movements, we're still the leader in value," Sprint spokesman Scott Sloat told Dow Jones Newswires. "If you add that in with our strong device portfolio and that we're the only one offering 4G, you get a good picture of where we are."
- see this Dow Jones Newswires article (sub. req.)
- see this release
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