Growing competition among wireless providers and cable companies is driving down prices for consumers.
All the major mobile carriers and cable companies are offering some type of incentive. Whether it’s increased data allowances for lower prices or offering the most high-definition channels and faster Internet speeds, the competition is aggressive.
The number of service-plan adjustments, promotions and price cuts has doubled in the first three months of this year compared with the last quarter of 2013, according to Craig Moffett, an analyst at MoffettNathanson Research in New York.
“And that’s good for the customer,” said Jeff Kagan, an independent telecommunications industry analyst. “The industry is transforming itself and becoming very customer-focused.”
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A few years ago, the mobile carriers were more concerned about selling smartphones to consumers. But now that most people have phones, it’s all about offering plans to win business or keep their existing customers longer, Kagan said.
“I’m a good example,” Roger Entner, an analyst with Recon Analytics in Dedham, Massachusetts, told Bloomberg News. “Last year I was paying $120 a month. I made a switch and now I’m down to $65. I’m getting twice the data at half the price.”
In the past six months, all the carriers have moved to lower pricing, data share plans that allow as few as two users or up to 10 users on one plan, and unlimited text messaging. Some even offer unlimited international messaging.
Under Sprint’s “Framily” plans, for example, a group of at least seven people can get unlimited talk, texting and 1 gigabyte of data for $25 a line, which is about a $30 discount from what’s charged for a single-user plan for the same service.
“I think this is the new direction of the wireless industry,” Kagan said in a recent online column. “Companies like AT&T will offer more for less to their customers. This idea has not yet spread throughout the industry yet, but as AT&T continues to win new business I think the writing is on the wall.”
“Cable, too, is changing,” he said. “They’re under pressure to satisfy and win customers back. That’s something they have never had to do before. It’s hard to say what’s going to happen there, but one thing is for sure: the cable companies will take better care of their customers.”
Along those lines, Charter Communications, which serves 71 Texas communities primarily in North Texas, including Fort Worth, recently announced its Charter Spectrum service of television, Internet and phone services, following last year’s upgrade to an all-digital system. Under the plan, customers will see Internet speeds double to 60 megabits per second and have access to more than 200 high-definition channels at no additional charge.
The faster Internet speed compares with AT&T U-verse speeds of up to 45 megabits per second and Verizon FiOS, which offers speeds up to 50 megabits.
Brian Anderson, Charter’s spokesman for the Southwest region, said last year’s upgrade to all-digital opened up a large amount of bandwidth in their network to allow the additional channels, including Fox Sports Southwest Plus HD, Nick Jr HD and Univision Deportes, an often requested network.
“We recognized there was an opportunity to do so much more with our North Texas market,” Anderson said. “What has happened in Fort Worth is very much what Charter wants to happen across the nation, delivering better value to our customers.”
Charter is spending about $2 billion to make digital upgrades in 29 states by the end of the year, he said.
“Charter is making good on the promises we made to our customers,” Anderson said. “It’s a change for the better.”
If one point resonates among all the providers, it is the idea of providing “value” to the customers. As of January, about 90 percent of American adults owned a cellphone, with 58 percent being smartphones, according to the Pew Research Center.
Verizon Wireless’s More Everything Plan, which rolled out in February, expands a shared data plan first offered about 18 months ago, said Robyn Parks, Verizon Wireless’s associate marketing director for Central Texas.
“We’re adding more value. It’s more data for the same amount of money,” Parks said.
For example, under some of its latest offerings, Verizon’s family plan for four shares 10 gigabytes of data and unlimited talk and text for $40 a line, matching the AT&T price. Verizon says its promotion is temporary.
“We’re always focused on what our customers need,” Parks said.
AT&T’s family share program offers four lines with unlimited messaging and calls and 10 gigabytes of data for $160 a month.
Laura Hazlewood, AT&T’s director of sales for Dallas/Fort Worth, said the plans and pricing are based on customer use and feedback, and are what the consumers are asking for right now.
“We’re continually looking at ways” to provide value, Hazlewood said. “That’s first and foremost on our priority list, for small businesses and families. It’s an objective of any company.”
Sprint’s “Framily” plan gives seven people or more unlimited talk and texting, and one gigabyte of data for $25 a line. Each member can then pay $20 a line to buy unlimited data.
Just last week, to sweeten the deal, Sprint began offering a switching bonus worth up to $650 in savings per subscriber to cover the costs of switching carriers. Through May 8, customers who move their number to Sprint can receive up to $300 in credit for their current phone and a Visa prepaid Card worth up to $350 to cover switching fees.
“We are seeing great momentum with the Sprint Framily plan and we want to make it easy as possible for customers to join our Framily,” said Jeff Hallock, Sprint’s chief marketing officer.
Earlier this year, some of the carriers were offering to pay customers to switch.
“These moves are more about customer retention in a market dominated by switchers,” wrote Fiercewireless.com editor Phil Goldstein. “And the carriers know it.”
This story contains information from Bloomberg News