AT&T Joins The Flat Rate Bandwagon, Hours After Verizon Wireless; Only Voice

Yea...finally competition is spurring some change. Hours after Verizon Wireless (NYSE: VZ) made it official that it was going flat-rate unlimited on certain plans, rival AT&T (NYSE: T) comes out with its own announcement: it would offer unlimited mobile phone calls for a flat rate of $99.99 a month, same as VZW. AT&T said the new fee option would be available on February 22 and that existing customers could sign up without having to extend their service contract. Unlike VZW, however, it only includes voice calling, and data and messaging will still require an additional fee. More info in the release here.

Sprint-owned Nextel and some other smaller carriers have had unlimited plans for a while. As Dianne mentioned in her post on VZW, will Verizon's plan spark a price war that will lead to the commoditization of mobile voice calls? Seems like it now. According to UBS analyst John Hodulik, quoted in this Reuters piece, the move would likely spur Sprint (NYSE: S) to come out with an even more aggressive offering, which could be bad news for the entire industry. "A more competitive Sprint combined with increasing pressure on voice ARPU does not bode well for medium-term growth of carriers with significant wireless exposure," Hodulik said in a research note.