It seems like investors’ interest in U.S carriers has dropped significantly, and fast. AT&T, T-Mobile, Verizon and Sprint have lost $45 billion of the combined market capitalization since the middle of November. Investors are worried by the amount of money carriers spend for more spectrum, but that’s not the only thing that worries them though, the second worry came from a recent warning from Verizon when the company said that tough competition will affect profits. Anyhow, since mid-November, the U.S government has sold around $43.7 billion worth of spectrum to U.S. mobile operators and will do something similar (though the sum will be different, of course) in 2016. Each of these carriers is trying to persuade consumers to switch to their respective networks, and that costs money, of course. These carriers are no strangers to directly jumping at each other and offering special deals for consumers which are already using some of the other networks. Sprint, for example, recently offered an interesting plan to cut consumer’s Verizon or AT&T bill in half while keeping the same amount of data.
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Verizon’s shares are down 10% since November 12th, which is clearly a sign of the competition and when you think about it, no wonder investors are worried. AT&T’s share is down 9% in that same period, while Sprint’s and T-Mobile’s share has also suffered a drop, 18 and 11% respectively. Revenue per post-paid customer is expected to decline this year on all top four U.S. carriers, this will actually happen for the first time in years. Considering this turn of events, it is to expected that each of these carriers will invest more in order to fight the competition and try to secure as many consumers as possible. UBS analyst, John Hodulik, said that the only way to end the price wars would be if regulators would start to allow mergers in the industry, or alternatively, if one carrier would decide to focus on profits and stops cutting prices… he doesn’t see either of these cases becoming a reality though. It will be interesting to see which of these carriers will come out on top in the next year or so.