Prices on Cell Service Rises

Published Date : Aug 11, 2014

Sprint’s failure to purchase T-Mobile US simply poses new options in wireless programs and lower prices for consumers in the U.S. However, it is predicted that in the future, slower expansion of coverage and difficult competition regarding the prices could lead to sluggish service. 

The chairman of Sprint, Masayoshi Son is hiring Marcelo Claure, who has been an entrepreneur but has not run a wireless carrier business before. He wants him to be the CEO of Sprint Corp., which could work out to be his new strategy for the company. Son said his company is shifting its interest from being ‘buying competitors’ to ‘competing antagonistically’ in the industry. 

Several investors are expecting prices to be a part of the company’s strategy. In addition, shares of the four popular U.S. wireless companies such as T-Mobile, AT&T, Verizon, and Sprint fell on Wednesday. 

Sprint is planning on mimicking T-Mobile US Inc. However, the CEO of T-Mobile, John Legere has attracted millions of new users towards its service since last year. He also prompted a cut in prices to AT&T, and last week launched a cheap family plan that offers unlimited talk-time and texting for $100 per month up to four phones. The plan offers 2.5 gigabytes of high-speed data each, which happens to be about $60 cheaper than its peer plans. However, the plan details differ as per conditions. 

Although, cheaper cellphone bills are always a good benefit for consumers, but Sprint, T-Mobile, and AT&T profits are down. On the contrary, Verizon is playing well in the market. This is because the U.S. wireless carriers capitalize more as compared to European companies. Hence, a higher profit in the U.S. is a crucial reason for them. 

Presently, the U.S. is building its way to 4G plan - a latest wireless technology, however, if a company does not profit, it will capitalize in cell towers and various other network devices.