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Unsurprisingly, Verizon will not enter any pricing war per analysts
For years now, Verizon has largely stayed out of any meaningful price-battle with T-Mobile, AT&T or even Sprint. Considering that their network is generally considered the best on the whole, they see no need to really compete against others on price.
To be fair, I am not saying that Verizon Wireless has made no price moves. When AT&T made moves to their shared data plans, Verizon responded with their own slight drop in shared data plans. Verizon even eliminated their $35 activation fee for new customers who signed a two-year contract for a select period of time.
But so far Verizon has stayed away from significant price drops with their most common data allotments, or removing their per-device fees charged to connect a device to a shared data plan.
Another significant reason for Verizon’s refusal to dig deep on price is that Wall Street analysts are worried about competition hitting Verizon’s stock price.
Still, Wall Street analysts are worried that Verizon will eventually join the pricing fisticuffs, eroding stock value over time. Speaking to ComputerWorld, Verizon tries to calm investor fears by sticking to the company’s line that they’re simply too awesome to have to compete on price. – DSLReports
Now, analysts are coming out and stating that they expect Verizon Wireless to continue to be conservative in terms of its pricing strategy. Translation? Verizon is not going to lower their prices because rivals are cutting their prices.
In a research note, Jefferies analysts Mike McCormack, Scott Goldman and Tudor Mustata detailed their key takeaways from an investor event hosted on Tuesday by Verizon’s “senior leadership.” The research note indicates that Verizon’s top management is confident in its wireless strategy. – Fierce Wireless
Analysts also claimed that Verizon’s management stated that they do “not believe the wireless industry feels much different than in the past, contrary to the broad view that competition is intensifying to detrimental levels.”
They are right. Verizon has firm control with AT&T on the countries wireless service. There is no need to shake up anything when their wireless operating income margin is still significantly higher than the margins at AT&T, T-Mobile and Sprint.