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3 Cell Carriers Start $99.99 Unlimited Plans

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By PETER SVENSSON, The Associated Press

Published: February 20, 2008

NEW YORK - Verizon Wireless introduced an unlimited calling plan for $99.99 a month Tuesday, a move quickly matched by AT&T Mobility and T-Mobile USA for a sequence that weighed down stock prices for all U.S. mobile carriers.
Verizon Wireless was apparently the first major carrier to make an "unlimited" plan available nationwide with no domestic roaming or long-distance fees. Its announcement was all but five hours old when AT&T announced its own unlimited plan.

Three hours later, T-Mobile followed suit, saying it would introduce a $99.99 plan Thursday. Unlike the Verizon Wireless and AT&T plans, T-Mobile's includes unlimited text and picture messaging, which costs $14.99 per month when added to other T-Mobile plans.

Sanford C. Bernstein analyst Craig Moffett wrote that Verizon Wireless' move was a blow to confusing pricing plans. He likened it to Sprint's introduction of flat-rate long-distance prices for land-line phones in the 1990s. That made it easier to compare plans and hastened a rapid decline in prices, Moffett wrote.

A relatively small number of cell-phone power users are expected to benefit from the new plans, but investors saw little chance for the carriers to recoup lost revenue by up-selling customers who now pay less.

Shares of Verizon Communications, which co-owns Verizon Wireless with Vodafone Group PLC of Britain, fell $2.49, almost 7 percent, to $35.34 in late afternoon trading. AT&T shares fell $2.03, or 5 percent, to close at $35.85. T-Mobile USA is a unit of Deutsche Telekom AG, whose U.S. shares fell 4 cents, or 2 percent, to $19.15.

There had been speculation that Sprint would introduce a nationwide unlimited plan. In May, it introduced one to residents of Philadelphia, Minneapolis, Tampa, and parts of Northern California and Western Nevada. Sprint's plan costs $119.99 a month and includes unlimited Web use, e-mail and messaging.

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