Verizon Communications Inc. is raising prices for its wireless service.
Analysts see this as a sign wireless carrier discounting wars may be just about over. Verizon said it planned to increase prices by $5 or $10 per month, based on the plan size.
More For The Money
The new pricing includes perks such as more data and the ability to carry over unused data to the following month.
A new feature, Safety Mode, helps customers avoid overage charges by slowing data speeds after the monthly cap is exceeded.
First Came The Price Cuts
Verizon’s price increase follows a period in which all wireless players, including Verizon, AT&T Inc., T-Mobile US Inc., and Sprint aggressively cut prices, did away with two-year contracts and overage fees, variously gave free data for tablets and even included free calling to Mexico.
Since last summer when T-Mobile passed Sprint to become the nation’s third-largest carrier, the market has stabilized. Sprint is the only carrier still pushing aggressive price cuts.
The Calm Before The Switching Storm
With fewer people canceling service and most holding onto phones for longer periods, the price increase by Verizon is seen as the “calm before a heavy switching period in the fall,” according to MoffettNathanson senior analyst, Craig Moffett.
Price increases signaling a relaxing of competition along with other factors have boosted some telecoms in the eyes of analysts and investors alike. The following companies made Jim Cramer’s TheStreet’s top 5 list of world-wide telecoms.
Expectations that AT&T would gain market share with the anticipated fall release of Apple's new iPhone, have driven the company’s stock up. In addition, the acquisition of Quickplay Media could make the company a major play in the streaming arena.
Verizon’s price increase and accompanying plan additions, including rollover data and its Safety Mode feature have been enough to generate interest in both the customer base and the investing community.
China’s largest telecom recently said it planned to boost its 4G subscriber base to as many as 7 million. This would represent a 59% annual expansion, although analysts say the company has to do better than that to hang on to its impressive 40% market share.
Indonesia-based Telekomunikasi’s performance year to date is 45%, impressive for a company that launched its IPO in 1995. Expected EPS growth over the next 5 years is 8.7%.
Rounding out TheStreet’s top 5, BCE Inc. has shown tremendous growth, leaving analysts to wonder just how high this stock can go. This Canadian telecom giant delivered Q1 earnings of $0.85 per share and with wireless a major part of the company’s offerings, there seems to be no end in sight for the amount of data customers are willing to buy.