Is The Wireless Sector Headed For A Price War?

Sprint ’s (S) Boost Mobile unit this week unveiled a new plan on its iDEN network which includes unlimited voice, texting, Web access and push-to-talk services for a flat pre-paid rate of $50 a month. Phones for the service, which all will be from Motorola (MOT), will start at $20. That sounds a pretty nice deal - and it has some investors worried that the move is going trigger a wireless price war. Craig Moffett, an analyst at Bernstein Research , obsereved in a note this morning that the price is “a new low in the wireless market,” with Sprint’s own “Simply Everything” plan priced at $99, while Metro PCS (PCS) and Leap Wireless (LEAP) offer similar fixed-rate plans in the $60 range. Sprint, in fact, seems to be positioning the service at the market targeted by Metro PCS and Leap, and both stocks are being hit hard today. But Moffett notes that, unlike Leap and Metro PCS, Boost will not have any regional restrictions, putting the service in more ... (link)