Increased use of data plans could follow the mobile-phone service providers’ moves to cut prices on unlimited calling plans.
Article courtesy of Business Week
Don’t be fooled by the latest round of price cuts by Verizon Wireless and AT&T. The two biggest U.S. mobile-phone companies said on Jan. 15 they’ll cut monthly prices on unlimited voice calling packages by $30.
While the decreases make voice calling cheaper, they and other price moves announced the same day are designed to get subscribers to opt for data plans that typically carry higher price tags and fatter margins for mobile-phone service providers. So the net effect may be increased revenue, analysts say. “We could see a move upwards rather than downwards,” says Jennifer Fritzsche, an analyst at Wells Fargo Securities in Chicago, who recommends buying shares of AT&T (T) and Verizon Communications (VZ), co-owner with Vodafone Group (VOD) of Verizon Wireless. “Any kind of voice pricing is very much a commodity,” Fritzsche tells Bloomberg News. “Data is the future.”
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