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T-Mobile and Sprint Likely to Keep Pricing War Going in 2015

February 25, 2015 - Written By Alexander Maxham

T-Mobile started a pricing war when John Legere took the reins as CEO of the fourth largest carrier in the US. Until recently, Sprint hadn’t really competed much with them. They were, for the most part, sticking with Verizon and AT&T’s tactics. But when Marcelo Claure took over as CEO for Sprint, their prices fell and fell quick. T-Mobile and Sprint’s prices are now neck and neck. Verizon has said over and over again that they won’t participate in this price war, but AT&T has been fighting tooth and nail. Verizon has lowered their prices a bit as well, surprisingly.

Last year, Verizon added 5.5 million postpaid subscribers, T-Mobile at 4.9m, and AT&T at 3.3m. Sprint ended the year losing 600,000 subscribers, in postpaid. So obviously, Verizon had the most momentum ending the year, but T-Mobile wasn’t far behind. On the Prepaid side, T-Mobile and Sprint are the ones that are surging ahead. Tracfone didn’t do too much, AT&T actually lost customers every quarter and Verizon doesn’t care about prepaid, they even said so.

While it appears that Verizon has all the momentum, it’s actually T-Mobile and Sprint. Sprint’s Q4 2014 was actually the first time in quite a while that they had added customers instead of losing them. That’s a pretty big deal. Now if these two keep up this pricing war, it’s going to make Verizon and AT&T get involved. That’s where they need to take calculated moves. While T-Mobile and Sprint can charge less, AT&T and Verizon have better and bigger networks. So if they charged the same as T-Mobile and Sprint, those two would start losing customers again. So they need to be careful, but I am definitely loving how things are playing out between the two lower tier carriers and the higher tier carriers.

With all the new devices that can be added to carrier plans these days, the mobile industry is just starting to grow. As Dish’s Ergen stated, it is in its infancy, and I completely agree. It’ll be interesting to see where these four fall at the end of 2015.