NEW YORK: The signals from US wireless companies are becoming clearer. Verizon on Tuesday followed AT&T with news of mobile revenue shrinking again in a slowing market.
Both operators, along with smaller Sprint, are now heralding an end to rate discounts and smartphone subsidies.
A fresh focus on the bottom line may cheer investors, but also attract the attention of regulators.
Sprint, which wooed more than 1 million customers with promotions including cutting their wireless bills in half, is being most explicit about backing out of the price wars.
After seven years of losses, it is aiming to be cash-flow positive next year.
Boss Marcelo Claure said Sprint, whose parent company SoftBank just unveiled plans to buy UK chipmaker ARM for $22 billion, soon will "move pricing up" and offer "more traditional pricing plans."
At the same time, AT&T downplayed its loss of 180,000 wireless customers between April and June - about the number Sprint gained - in its results.
Though the $260 billion operator is offering incentives for its unsubsidized "Bring Your Own Phone" plans, it said it isn't worried about losing lower-end customers.
Although mobile revenue is falling, margins are rising. AT&T's increased in the second quarter to 31.4 percent from 29.9 percent a year ago.
That's a good sign for a mature industry. Verizon also is trying to shore up cellular profit as its operating revenue slides and customer growth slows.
It has been subtly raising prices by offering larger data packages. Verizon said it has weaned more than half its customers off device subsidies, in a move akin to Netflix's clumsily named "un-grandfathering." Consumers have been the beneficiaries of the price aggression.
T-Mobile could yet keep the pressure on and a new entrant, cable operator Comcast, may be a wildcard. Telecom titans are nevertheless delivering a message that discounts may be fading.
In time, that should change the calculus for shareholders. Trustbusters who quashed AT&T's attempt to buy T-Mobile a few years ago in a bid to keep competition robust, will be tuning into the oligopoly's price changes, too.
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