AT&T matches Verizon (T-Mobile follows): Welcome to the wireless price wars

Updated: Verizon Wireless announces a $99.99 a month unlimited wireless access plan and AT&T matches it just a few hours later in a move that almost resembles something you'd see in the airline industry.

Updated: Verizon Wireless announces a $99.99 a month unlimited wireless access plan and AT&T matches it just a few hours later in a move that almost resembles something you'd see in the airline industry.

First, Verizon Wireless announced Tuesday that it will immediately offer nationwide anytime wireless minutes in the U.S. for $99.99 a month. It also launched two tiers of BroadbandAccess plans starting on March 2. The plans will run $39.99 a month for 50 MB of data usage or $59.99 a month for 5 GB of data usage.

Verizon's move got a good amount of attention on Techmeme, but just a few hours later AT&T matched Verizon's $99.99 a month plan starting Feb. 22. In a statement AT&T said it is delivering value and simplified pricing, but also noted "this is a highly competitive market."

Update: T-Mobile has already matched. In a statement emailed to me the company said: "To help our customers stick together with those who matter most, and to provide the utmost value to our customers, T-Mobile today is announcing a new rate plan featuring unlimited voice and unlimited messaging for just $99.99.  This offer will be available beginning Thursday, February 21."

This behavior, which is great for consumers, raises more than a few questions. Among them:

  • Is a slowing economy pushing a wireless price war? A potential recession must be in these carriers' models if they are matching price cuts in hours. And a battle on price between AT&T and Verizon Wireless can only spell doom for smaller carriers like Sprint and T-Mobile.
  • What did demand for wireless services look like in January and February? Something pushed Verizon and AT&T to move pronto with these plans. Both carriers have been kicking around this flat-rate concept for more than a year.
  • What's next? Other carriers are likely to match. You can almost hear the pricing power diminish among wireless carriers. Let's say you have one of these new flat rate plans for $99 a month. That's still more than $1,200 a year once you include taxes and other fees. Bottom line: Wireless access prices could come down more. Toss in worries about your mortgage, credit card debts and car payments and it doesn't take a genius to figure out this wireless price war may just be getting started.