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Monday, 13 January 2014 12:06

Mobile revolution at threat because of ISP price war

Written by Nick Farrell



Wall Street worried

The cocaine nose jobs of Wall Street are worried about a nasty price war between comms companies in the US which could undermine the mobile Internet market.

T-Mobile US has been luring customers from other carriers and AT&T counter-attacked on January 3 by offering to pay consumers to switch from T-Mobile. Days later Sprint Corp promised big discounts for family and friend groups. On Wednesday, T-Mobile upped the ante, saying it would pay hefty exit costs for converts. (Infidels. Ed)

All this is good news for the consumer in the short term but the price war could destroy the industry in the longer term. Analysts fear it could result in the loss of billions of dollars of revenue. Generally, the phone companies over the pond are perceived as bastards of the first order, but it could actually result in less competition as Verizon Wireless would be able to shrug off T-Mobile's moves, since they already control about two-thirds of the market and kill off its less profitable rival.

Some investors are still hoping for a ceasefire if SoftBank's hopes of merging Sprint with T-Mobile come to fruition. It may make a bid for T-Mobile as soon as this year but may be killed off by the regulators.

Nick Farrell

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