Industry analysts firmly place the blame for the stocks' performance on a battle that Verizon (VZ) , AT&T (T) , T-Mobile (TMUS) and Sprint (S) have been waging for the last year over new customers. This situation is extremely advantageous to consumers because it keeps down costs and offers them more choice. But it is proving costly to the carriers.
"The ability to move between carriers has never been easier. The carriers are willing to pay to get customers from each other and AT&T, Sprint and T-Mobile now have no-contract deals giving users even lower cost," IDC's telecom analyst Brian Haven told TheStreet.
Just this week T-Mobile upped the ante by rolling out a new "unlimited" plan offer, while Sprint unveiled its "Cut Your Bill in Half" program last week. Sprint has already reported positive results from its new plan.
These plans may gain new subscribers, but they also make investors wary because they create an unstable market with essentially the same group of customers shifting from company to company instead of creating real growth, said Bill Menezes, principal research analyst at Gartner (IT) . As proof, Verizon and AT&T made comments on a weaker-than-expected fourth quarter.