Like Verizon, AT&T has been pushing its Next offering, in which customers are not beholden to an annual contract but instead pay for their smartphone device through 20 or 26 monthly installments. Customers are eligible to receive a new device every 12 or 18 months, depending on which installment plan they choose. There is no down payment or fees related to activation, upgrades or financing, according to AT&T.
Verizon Wireless and T-Mobile are the two cellular phone carriers delivering the most "bang for the buck," according to the YouGov BrandIndex. The study showed Verizon's latest "More Everything" service plans have been offering reduced rates since mid-February but can't compete with T-Mobile's unlimited data "Uncarrier" plans. The overall result is a virtual tie in the latest BrandIndex "Value" score.
"This cut could drive Edge adoption above our 20% of smartphone sales estimate, creating upside to our expectations for $700M in incremental EBITDA and $0.11 in incremental EPS from the [Equipment Installment Plan] in '14," UBS analyst John Hodulik writes in a research note. "The new pricing will drive higher uptake of the 10GB plan given the discount it provides a family versus smaller data plans, helping to offset the impact of the price decrease. We believe VZ made this move after seeing some pressure from AT&T's price cut in 1Q. T-Mo continues to offer the lowest price point at $140/mo for a family plan with similar terms while Sprint remains well above the others at $200/mo."
That said, "Sprint will likely change its pricing around mid-year as it readies its network and seeks to grow subs in 2H14," the note says.
-- Written by Laurie Kulikowski in New York.