T-Mobile, cable likely big winners in recession
New Street Research believes that, as the economy takes a turn for the worse, postpaid cellphone plans are a better value than prepaid phone plans. New Street named T-Mobile and cable companies as the main beneficiaries of this trend – at the expense of AT&T and Verizon. “Competition has driven down the price of postpaid plans, while eliminating barriers to adoption (contracts; credit thresholds),” wrote New Street’s Jonathan Chaplin and Philip Burnett. “Service pricing is now similar and, in some cases, lower for unlimited postpaid plans.” When you factor in device subsidies, content and other features included in postpaid plans, they’re a much better value than prepaid, they said, adding: “If households become more value conscious, we would expect them to move to value-focused postpaid offerings.” Interestingly, the cable companies forced wireless carriers to come out with lower-priced rate plans, but those plans are still new or new-ish, so time will tell how much they help the wireless carriers.
T-Mobile, cable likely big winners in recession: analysts