Are Wireless Price Wars a Sign Our is Economy Crashing?

July 19, 2016

By Ernest Worthman

Executive Editor
AGL Small Cell Magazine

Yes, if you believe the story put out by an analyst from Seeking Alpha. This is an organization I haven’t heard of before. I know, and work with, many of the top analysts in this, and several peripheral industries; ABI, Forrester, Gartner, iGR, Strategy Analysts, and others. And, these are professional organizations in which I have a lot of confidence that they know what they are talking about.

But every so often, I get something from an obscure analyst agency that I have never heard of. In this case it is a Quinn Foley of Seeking Alpha, an analysis organization that plays in the finance markets. Wikipedia describes them as “a crowd-sourced content service for financial markets.” Hmmm…wonder what that really means?

Well, they certainly should be qualified to decide the economy is failing and make the statement “The carrier price wars are a sign of a weak U.S. economy.” Foley came upon that conclusion because “Verizon Wireless revamped its data price structure by decreasing the per-gigabyte price of data, but raising overall prices.”

Seriously, Foley? It is clear that Seeking Alpha knows nothing about the wireless business. When I spoke with some of my sources, they simply dismissed this as an attention-grabbing headline tactic trying to get some eyeballs on the organization.

Obviously he doesn’t have a clue that, today, mobile wireless is a commodity. In most cases, the vendor with the best deals, for the least costs gets the customer; at least at the consumer end where most of the users are. And that is the way it has been for years, already.

Foley throws in that he thinks the reason why T-Mobile and Sprint have been so successful in their strategies is because the economy is weak and consumers have become more sensitive to price. He adds that “Until conditions in the labor market improve, customers will remain highly sensitive to price.”

Well, I have a news flash for you Mr. Foley. Customers have been sensitive to price in the mobile wireless segment for years – whether it is a recession, depression, boom or bust. And to say that the latest round of cutthroat competition that simply reworks the tired cornucopia of every evolving plans, spiffs, bonuses, offers, freebees, ad nauseam, is a sign that the economy is headed for a crash is irresponsible nonsense. It may be that it is, but the carriers game playing has nothing to do with it.