AT&T, Verizon, and Sprint are Doubling Down on Data This Month
There are no shortage of gimmicks in the U.S. wireless carrier market, but this month three of the country's largest telecoms have legitimately doubled their data allotment for new and existing customers.
Verizon Communications , AT&T , and Sprint are boosting their data plans in an all-out war to keep churn rates low and subscriber numbers high.
Doubling the data deals
All the major carriers, minus T-Mobile, launched new plans this month to double current and new customer data, if users sign up before the end of October. For simplicity's sake, let's look at one comparable plan for each of the carriers:
Source: AT&T, Verizon, and Sprint..
There are obviously other plans available at varying prices, but the table shows AT&T's 30-gigabyte plan is the most expensive, followed by Verizon. Sprint offers an amazing 60 GB for the same price as Verizon's 30 GB plan, though customers would do well to look into its network rating.
In the traditional (i.e., complicated) spirit of wireless carriers, these aren't the total costs of the plans. AT&T and Verizon charge a monthly access fee per line for their shared plans, which ranges from $10 to $40 depending on whether you bring your own device to their network, enroll in an upgrade program, or sign a two-year contract. In contrast, Sprint is dropping its monthly access fee through 2015 if you choose one of its new plans before the end of the month.
Why so many deals?
Is it coincidence that three of the nation's four largest wireless carriers doubled the amount of data for customers all at the same time? Hardly.
The American wireless industry has been a battle ground recent years, spurred in part by aggressive moves by T-Mobile to gain customers. The company has boosted its customer base by paying cancellation fees for users who switch from another carrier to its service, dropping contracts, and giving away free music streaming, all while building a stronger network.
But the data doubling likely has more to do with the launch of Apple's new iPhone 6 and 6 Plus last month. Apple said the new devices sold more than 10 million units in the first weekend. Domestic wireless carriers have offered new deals to entice customers since the latest iPhones launched. Sprint is offering a "free iPhone for life" under one of its plans and Verizon is giving away a new iPhone 6 if you trade in your old one.
Being aggressive with iPhone deals isn't enough, though. Carriers know customers will use lots of data on the iPhones, so they're trying to give away more of it it to keep customers from jumping to another company.
Carriers will always come up with deals competitors will need to match, and right now that latest offer happens to be doubling the data. Investors shouldn't get sidetracked by which company has the better offer, because it can often be difficult to determine which deal is actually better.
Giving more data to current customers won't increase revenue, but it will likely keep subscribers from leaving -- which keeps churn rates low. Though Sprint is giving away the most data, I expect Verizon and AT&T to be the biggest winners from the promotional data plans. Their customers are on the best networks in the U.S. and now have access to even more data at no additional cost. Add to that the ability to upgrade to the new iPhones and it's not likely many customers will leave.
As we head closer to the holiday season, I expect we'll see even more phone deals attempting to lure new customers, particularly as Verizon and AT&T fight to provide the best network.
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The article AT&T, Verizon, and Sprint are Doubling Down on Data This Month originally appeared on Fool.com.Chris Neiger has no position in any stocks mentioned. The Motley Fool recommends Apple. The Motley Fool owns shares of Apple. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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