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Phil_Britt
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Phil_Britt,
User Rank: Light Sabre
4/3/2014 | 6:50:27 PM
Re: More fun with numbers
Agreed, Mendyk. 

 

The price wars of the airline industry were unsustainable, but the airlines though that was the best way to lure customers. They had plenty of customers, but also plenty of red ink. Now the airlines are making a lot of money -- at the customers' expense and inconvenience.

Airlines, telecom carriers and other businesses can only go so far with price wars. And cheaper (price) service usually means cheaper (quality) service.
TaraSeals
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TaraSeals,
User Rank: Light Sabre
4/3/2014 | 4:51:56 PM
Re: More fun with numbers
I agree, Mendyk, and I also think that unlike long-distance or home phone service, wireless from an infrastructure perspective of course has a completely different cost structure, so the race to zero specter really isn't feasible. That said, my prediction is that going forward voice will always be the loss leader...while video and plans oriented around accessing video (to your point about app-oriented plans, Sarah) will become more and more attractive.

I think T-Mobile's genius  is in its positioning as being above the AT&T-Verizon fray; it's a little younger, a little hipper...and definitely has more whimsy than Sprint (and incidentally, that Framily campaign bothers me to no end--next thing you know it will introduce a multilevel marketing element).
mendyk
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mendyk,
User Rank: Light Sabre
4/3/2014 | 3:47:43 PM
Re: More fun with numbers
Winning customers through unsustainable pricing rarely works as a long-term strategy. So the question is whether there's enough real margin in current prices to sweat things down. I will guess that any too-good-to-be-true price plan will be exactly that -- a lowball bait price that will require a good portion of hidden extras.
SarahReedy
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SarahReedy,
User Rank: Blogger
4/3/2014 | 3:43:19 PM
Re: More fun with numbers
That could change with a real price war of the likes Son is promising. "Let's fight back! Let's fight back!"
mendyk
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mendyk,
User Rank: Light Sabre
4/3/2014 | 3:40:28 PM
Re: More fun with numbers
The subscriber war of attrition is a less violent but equally pointless analog to trench warfare in World War I. Gain two points, lose three. Gain two back, lose one. Etc.
SarahReedy
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SarahReedy,
User Rank: Blogger
4/3/2014 | 3:31:08 PM
Re: More fun with numbers
True, it's just not happening as much as you might expect yet. Adding 800,000 in total is still pretty good for the industry. It'd be lower if they were just trading customers.
mendyk
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mendyk,
User Rank: Light Sabre
4/3/2014 | 3:28:16 PM
More fun with numbers
If churn is up at competitors but down at T-Mobile, doesn't that suggest that there's more than thin air at play? Also, the fact that competitors have lowered expectations for net adds while T-Mobile is increasing its net adds also indicates something positive is happening.
SarahReedy
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SarahReedy,
User Rank: Blogger
4/3/2014 | 3:07:24 PM
Next pricing trend?
Any thoughts on what the next big pricing shake up or trend will be? My money is on more toll-free/sponsored data-type partnerships.
SarahReedy
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SarahReedy,
User Rank: Blogger
4/3/2014 | 3:04:53 PM
Uncarrier moves
Going back through to add all those links on past T-Mobile moves reminded me just how much it has done in such a short period of time. A lot of its pricing changes were more about changing the structure and promotions, but there were also some significant price drops in there. It'll be interesting to see how the market continues to evolve in pricing and plans going forward. 
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