T-Mobile is scaring Wall Street for all the right reasons (BLOG)

<div dir="ltr" style="text-align: left;" trbidi="on"><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi2PthxwA8-M24TMp55DYayPU0X1cUysouzqiqIwJErJrlvhCVrZ_EhatpfjJJRL_C-G0LdGad6bxXesDTSWUjpAxrHKi2_66AA5EaT-KPjWo2EsXFVkBcv3P2u6x6Cf-z7cQyB1m1U4ao/s1600/john-legere-2.jpg" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" height="219" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi2PthxwA8-M24TMp55DYayPU0X1cUysouzqiqIwJErJrlvhCVrZ_EhatpfjJJRL_C-G0LdGad6bxXesDTSWUjpAxrHKi2_66AA5EaT-KPjWo2EsXFVkBcv3P2u6x6Cf-z7cQyB1m1U4ao/s320/john-legere-2.jpg" width="320" /></a></div><div id="yui_3_9_1_1_1389762497738_21582" style="background-color: white; font-family: 'Helvetica Neue', HelveticaNeue, helvetica, arial, sans-serif; font-size: 15px; line-height: 24.000001907348633px; margin-bottom: 1.1em;">Here’s how you know that <a data-rapid_p="9" href="http://bgr.com/tag/t-mobile" style="color: #324fe1; cursor: pointer; text-decoration: none;">T-Mobile</a> is onto something: It’s making Wall Street very nervous for all the right reasons.<em id="yui_3_9_1_1_1389762497738_21592">Reuters</em> recently talked with several financial analysts who all expressed fear that T-Mobile was sparking a pricing war in the wireless industry and that carriers were starting to actually compete with one another for our business. Or as <em>Reuters</em>puts it, “the intensifying competition is a new challenge to a U.S. industry long used to imposing its will on consumers, and analysts fear it could result in the loss of billions of dollars of revenue.”<span id="more-2765025"></span></div><div id="yui_3_9_1_1_1389762497738_21063" style="background-color: white; font-family: 'Helvetica Neue', HelveticaNeue, helvetica, arial, sans-serif; font-size: 15px; line-height: 24.000001907348633px; margin-bottom: 1.1em;">Jefferies analyst Michael McCormack, for one, told <em>Reuters</em>that he found it “most disappointing” that <a data-rapid_p="10" href="http://bgr.com/tag/att" style="color: #324fe1; cursor: pointer; text-decoration: none;">AT&T</a> has been reacting to T-Mobile’s “Uncarrier” moves by offering special offers of its own. After all, it’s harder to <a data-rapid_p="11" href="http://bgr.com/2013/10/23/att-q3-2013-earnings/" style="color: #324fe1; cursor: pointer; text-decoration: none;">maintain sky-high margins</a> when you’re <a data-rapid_p="12" href="http://bgr.com/2014/01/03/att-t-mobile-450-dollar-offer/" style="color: #324fe1; cursor: pointer; text-decoration: none;">offering T-Mobile subscribers an extra $200 bonus</a> to switch.</div><div id="yui_3_9_1_1_1389762497738_21609" style="background-color: white; font-family: 'Helvetica Neue', HelveticaNeue, helvetica, arial, sans-serif; font-size: 15px; line-height: 24.000001907348633px; margin-bottom: 1.1em;">Roe Equity Research analyst Kevin Roe, meanwhile, said that T-Mobile’s moves have created an “unhealthy market dynamic” that “will continue until AT&T has market-share stability,” which likely won’t be until it fights many more bloody battles with T-Mobile over wireless subscribers. And New Street Research analyst Felix Wai told <em>Reuters</em> that he feared the added competition would force carriers to spend more on marketing, a move that would once again eat into their margins.</div><div id="yui_3_9_1_1_1389762497738_21621" style="background-color: white; font-family: 'Helvetica Neue', HelveticaNeue, helvetica, arial, sans-serif; font-size: 15px; line-height: 24.000001907348633px; margin-bottom: 1.1em;">Of course, the average customer should cheer all this Wall Street hand-wringing: To use some Econ 101 terminology, the loss of carrier margins will mean an increase in consumer surplus in the form of lower prices. Or put another way, what’s bad for big wireless carriers might just be good for everyone else.</div><div id="yui_3_9_1_1_1389762497738_21621" style="background-color: white; font-family: 'Helvetica Neue', HelveticaNeue, helvetica, arial, sans-serif; font-size: 15px; line-height: 24.000001907348633px; margin-bottom: 1.1em;"><br /></div><div id="yui_3_9_1_1_1389762497738_21621" style="background-color: white; font-family: 'Helvetica Neue', HelveticaNeue, helvetica, arial, sans-serif; font-size: 15px; line-height: 24.000001907348633px; margin-bottom: 1.1em;">-BGR</div></div>

T-Mobile is scaring Wall Street for all the right reasons (BLOG)

Here’s how you know that  T-Mobile  is onto something: It’s making Wall Street very nervous for all the right reasons. Reuters  recently tal...

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