BOSTON-The Yankee Group has concluded that wireless prices are both stabilizing and
homogenizing. The company’s Wireless Price Index, which has tracked wireless prices in 25 cities since 1994, shows
that rates fell an average of 5 percent during the third quarter.
Other key findings for the quarter include:
Overall, the greatest decrease in digital and personal communications services pricing occurs at high minutes-of-use
levels, averaging a decline of 6 percent at 250 MOU per month and above;
Analog prices remain stable at low
MOU usage levels, but have significantly increased at high MOU levels as some cellular carriers have eliminated
analog plans that offer many bundled minutes. At 250 MOU per month, PCS is nearly 40 percent cheaper than analog
cellular.
Mark Lowenstein, senior vice president of the Yankee Group, said the newest trend in pricing is the
movement toward homogeneous pricing. “First, it was removing the distinction between peak and off-peak rates,
and then, we saw the implementation of flat roaming and long-distance charges,” he said. “Now we’re
seeing the growing popularity of all-inclusive rate plans which include roaming and long-distance.”
Yankee
Group also found the price differential between cities has narrowed. The average price range from the least to the most
expensive city decreased from 18 cents in the second quarter to 13 cents in the third quarter. Among the top 25
metropolitan areas, the three most expensive cities for wireless are New York, Los Angeles and Dallas. The three least
expensive are St. Louis, Philadelphia and Portland, Ore.
