Overall wireless pricing has decreased between 6.1 percent and 10 percent in the United States since September, said Robinson-Humphrey Co. L.L.C.’s latest pricing survey.
“This relatively low price decrease is quite encouraging, considering that this survey was done during the most competitive time of the year, the December holiday season. We consider this a bullish sign for wireless service providers, as it should eliminate investors’ fears of price wars,” said Robinson-Humphrey.
The firm surveyed 36 markets in which personal communications services operators have begun offering service and found that PCS pricing was 16.5 percent to 20.3 percent lower than cellular pricing, depending on the plan.
In the 24 of the 36 survey markets in which both A- and B-block PCS operators have launched service, Robinson-Humphrey said the average PCS discount to cellular is 14.3 percent, 22.7 percent and 22.3 percent respectively for low-end, mid-level and high-end pricing plans. The firm attributes these findings to increased PCS promotions in these cities-especially for the large bucket-minute plans-and cellular companies’ focus on low- and mid-priced plans for their promotional activity in many of these markets.
The Eastern and Midwest regions showed the most significant pricing difference, while the Southeast region showed the slightest pricing difference, said the firm.
September’s survey indicated the Western region logged the largest price decrease of any of the regions, with the heaviest discounts coming from cellular providers, primarily AirTouch Cellular and AT&T Wireless Services Inc. During December, the firm found that many of AirTouch’s pricing plans increased, primarily attributed to the carrier’s elimination of the “nickel and dime” promotions it was offering in several Western and Midwestern markets in the summer. Like many of the cellular operators, AirTouch has pulled back many of its doubled-minute promotions, offering double minutes in select markets, said Robinson-Humphrey.
Bell Atlantic Mobile, which operates several cellular markets in the Eastern region, has been actively cutting the price of its service offerings, particularly in the middle and high-end levels by offering bonus minutes on its DigitalChoice plans, said the study.
AT&T Wireless’ cellular prices for its mid-level and high-end plans have declined between 21.1 percent and 62.4 percent in the Western region, while the company’s prices for its high-end plans in the Midwest have decreased 50 percent to 63 percent and are considerably below its PCS competitors there. The carrier’s new digital pricing in the Eastern region is narrowing the gap between it and its PCS competitors, said the study. AT&T Wireless appears to be pricing its PCS offering aggressively in the Southeast and the Midwest, and less in the Eastern region.
BellSouth Cellular Corp.’s average prices have come down some 15 percent to 40 percent, but SBC Communications Inc.’s primary change in pricing has resulted in an increase in the cost of its high-end plans. The carrier has expired its dime-a-minute plans causing price increases of up to 90 percent, said Robinson-Humphrey.
