Price War Among Carriers May Benefit IPhone Users, Analyst Says

The Apple iPhone, which starts at $199, has been competitively priced for some time now, but its service plans remain usurious and a major turnoff to lot of potential customers. Many folks won’t balk at paying a couple hundred bucks for a cool piece of hardware, but they’ll pass after discovering the monthly bill from AT&T Wireless will run at least $75, including taxes. Competing gadgets aren’t much better. Example: The iPhone-like Samsung Omnia also costs around $200 and comes with a $70-or-higher monthly charge from Verizon Wireless.

But there’s good news: A brewing price war among mobile carriers may drive down those monthly fees -- a boon to iPhone fans and other smart phone users. Analyst Shaw Wu of Kaufman Bros. says that a difficult economy is forcing second-tier wireless providers like Sprint and T-Mobile to aggressively slash voice and data fees to draw customers. For instance, Sprint last year launched its “Simply Everything” plan, an all-you-can-eat deal with unlimited voice, data, email, Web, TV, and even GPS for $100 per month. More recently, Sprint subsidiary Boost Mobile began offering a $50 unlimited voice, messaging, and Web plan, albeit without as many goodies as Simply Everything; and T-Mobile is currently testing a $50 to $75 unlimited plan of its own.

In a report released Monday, Wu asserts that the high costs of AT&T’s service plans -- not the cost of the hardware itself -- are limiting the adoption of the iPhone. He believes that the cheaper service plans from Sprint and T-Mobile will help boost those carriers’ sales, which have lagged behind those of industry leaders AT&T and Verizon.


Certainly it’s just a matter of time before wireless service plans drop in price, and hopefully the crappy economy will speed up that development. Besides, consumers in general love all-you-can-use rather than pay-as-you-go plans, as the former removes that queasy feeling that accompanies each month’s cell phone bill. Furthermore, carriers have been ripping us off for long enough. Twenty cents for a text message? That says it all.

For comprehensive coverage of the Android ecosystem, visit Greenbot.com.

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