Wireless Price War Is Slow Suicide

The latest salvo by AT&T Wireless(AWE Quote) in the wireless pricing wars has analysts scratching their heads: Why would the company choose to lure new customers by promoting low prices rather than new products at a time when the troubled industry can hardly afford a new round of discounts?

The answer may lie in wireless companies' mad scramble to boost new-subscriber figures -- which are closely scrutinized by investors -- no matter what the cost to the company or the industry, some analysts say.

AT&T Wireless last week announced a dramatic price discount to its new high-speed network that seemed to defy logic: As the industry struggles with declining growth, falling income and a heavy debt load, the nation's third-largest wireless carrier chose to use promotional rate incentives to snag subscribers, rather than relying on the strength of its new wireless data services alone. ...