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posted by
mattie_p
on Thursday February 20 2014, @09:36PM
from the but-think-of-the-stockholders dept.
from the but-think-of-the-stockholders dept.
siliconwafer writes:
"Competition among wireless providers could hurt profits in the wireless industry, according to a report by Reuters. T-Mobile's aggressive price structure, abandonment of contracts, and termination-fee payments have put downward pressure on mobile costs for consumers, and Wall Street analysts are forecasting a reduction in profits in the wireless sector as a result. AT&T in particular is showing signs of stress. While this may be bad news for the wireless industry, it's good news for consumers."
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Wireless Providers Competing More Than Ever
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(Score: 5, Insightful) by WildWombat on Thursday February 20 2014, @11:03PM
Sprints dismal financials not withstanding I don't think that there is too much competition in the US cell market. If there were more competition we wouldn't have some of the highest prices for service in the world. These high prices don't result in great service either; pretty much everyone here hates their carrier. The high rates and poor service we receive are more indicative of a market largely lacking in competition rather that one suffering from an over abundance of it.
A couple of links about US cell phone prices vs. the rest of the world:
http://www.androidcentral.com/us-mobile-data-price s-among-most-expensive-world [androidcentral.com]
http://news.cnet.com/8301-1035_3-10307726-94.html [cnet.com]
Those arguing for a free market often site the Adam Smith's 'invisible hand' and how competition results in greater gains for society. This is often used as a reason to forgo regulation of a market. Rarely mentioned, however, are the conditions Smith listed under which this actually happens. Things like there had to be at least seven competitors. Or that the largest couldn't be more than the second largest because it would then gain to much pricing power. We don't see anything like that type of situation in the US. Four players in a market with a ridiculously high barrier to entry doesn't make for a competitive market place at all.
I certainly hope that the government doesn't allow any more consolidation. Say Sprints finances continue to deteriorate to the point where they are facing bankruptcy. I would rather let them go bankrupt and then have some other company buy their assets and enter the market than allow them to merge with one of the already to large players we already have.
Cheers,
-WW
(Score: 3, Informative) by No Respect on Friday February 21 2014, @02:57AM
AT&T is unloading all their POTS copper landline systems. Oregon, Connecticut, coast-to-coast basically. The reason? It's not that the landline business is not profitable, it's that they can make MO MONEY on wireless. And not just wireless, 4G and LTE, mind you, the gravy comes from overage charges for data use. Their publicly stated projections for revenue growth are predicated on gouging their customers.