- Worries about a price war in wireless can be traced back to leadership changes, mainly at Verizon, starting in the fall of 2025
- Verizon’s offer of $25/four lines with free iPhone 17 devices stoked the flames
- Several analysts say fears of a wireless price war are overblown
Before the holidays, Verizon triggered some fears of a wireless price war with an offer of four lines for $100, including four free iPhone 17 devices. A big unknown at the time was whether it was just a short-time promotion or something that would last longer.
Well, at last check, it’s nearly the end of January and Verizon is still advertising the four for $100 deal, as seen in this commercial featuring a family of four dressed in cozy holiday attire and apparently having a hard time letting go of their Christmas tree. The ad ran during Sunday’s NFL game between the Seattle Seahawks and the Los Angeles Rams.
(BTW, the Seahawks are going to the Super Bowl.)
Back to the other game: wireless pricing and promotions. While some investors fear a price war that will erode ARPU for the Big 3 wireless carriers, several analysts are of the mind that it’s not something to get too worked up about.
Origin of price war concerns
New Street Research (NSR) analyst David Barden suspects investors’ concerns ignited with the arrival of Dan Schulman as CEO of Verizon in early October. Verizon’s press release announcing his promotion referred to his intention to increase Verizon’s share of net adds.
“Absent an obvious quick fix, wireless stocks tumbled on the belief that price was the clearest path to market share gains,” Barden wrote in a note for investors Tuesday. “Verizon has been trying to walk back this reaction, in our view, by pointing to the core ‘Dan Plan’ of shifting the company’s value proposition from network-only, to customer-first.”
Barden said he and his colleagues are not unconcerned, but they don’t believe a price war is looming.
“As we have said in the past, Verizon has the best house in the neighborhood, and they know that a price war will burn down this neighborhood. If they manage to capture ~200-300k postpaid phone net adds each from AT&T and T-Mobile, it doesn’t hurt those companies meaningfully while also satisfying Verizon’s near-term goal, in our view,” he wrote.
Verizon CEO’s code words
It bears noting that Schulman, during his first earnings call as Verizon’s CEO on October 29, said his top strategic imperative for Verizon was to grow its customer base “profitably” across the mobile and broadband businesses, and “this is not going to be about promotional activities that can be quickly imitated.”
Then in mid-December, Verizon rolled out the $25/four lines plan that seemed to confirm fears about an imminent price war.
In a December 10 note for investors, LightShed Partners analysts Walter Piecyk and Joe Galone said Verizon’s price cuts on both entry-level and premium mobile rate plans amounted to a clear negative signal for the industry, “as it points to renewed pressure on ARPU, which is critical to revenue stability in a mature, fully penetrated market with limited prospects for new growth.”
Flash forward to this week, and other analysts are not seeing all doom and gloom.
“I’m not really seeing a price war,” said Jeff Moore, principal of Wave7 Research, which closely tracks carrier promotions and pricing.
When T-Mobile announced a new “Better Value” plan earlier this month – starting at $140/month for three lines – Moore did not interpret that to be a direct response to Verizon’s plan because it was more of a top-of-the-line plan that focuses on value/perks versus discounts.
Roger Entner, analyst and founder of Recon Analytics, said financial analysts worried about price wars can chill out. “The fears about the price wars are overblown,” he told Fierce.
Price war or no price war, expect to hear more about the “Dan Plan,” as NSR’s Barden dubs it, when Verizon reports Q4 results this Friday.