Tomahawk, WI 12/11/2013 (BasicsMedia) – AT&T Inc. (NYSE:T) has recently introduced Mobile Share Value plans that help users in reducing their monthly payment when paying for their own devices. These plans should drive more margins and leasing of smartphones. For unsubsidized devices, the company introduced a discount plan with no-contract that can be bought monthly for $25 and also device payment. The company also introduced a plan for subsidized devices that can be bought monthly at $40 on a two-year contract. As the industry slowly reduces the role of subsidies, these plans are intended to increase the trend of smartphone leasing plans.  This will help in raising the profit margins for the industry in the long run.

Plans’ Impact

The biggest impact of these new plans should be on T-Mobile.  This company offers lower cost plans than AT&T Inc. (NYSE:T) and it has been winning low-end subscribers due to this. If we talk about the impact of the new plans of AT&T on Verizon Communications (NYSE:VZ), we may say that in the immediate term, the company may not respond, but it may offer similar leasing discount plans in the future.

Competition

The low-end plans of the company are now more competitive if we compare it with the attractive offers provided by T-Mobile (NYSE:TMUS). T-Mobile’s “un-carrier” campaign with phone financing, no-contract plans and low cost international roaming rates are highly attracting customers. In 3Q’13, the company added approximately 650,000 monthly users. However, this followed the decline of more than 2 million users last year.

Comparisons

The new smartphone plans of AT&T Inc. (NYSE:T) have higher prices for subscribers with more usage and lower prices for subscribers with less usage. The new 300 MB plan introduced by the company is $10 less per device if compared to the existing plans, while the 2 GB plan is $5 less.  However, the 4 GB plan remains unchanged.

DISCLAIMER: This content is neither an offer nor recommendation to buy or sell any security. We hold no investment licenses and are thus neither licensed nor qualified to provide investment advice. The content in this report or email is not provided to any individual with a view toward their individual circumstances. While all information is believed to be reliable, it is not guaranteed by us to be accurate. Individuals should assume that all information contained in our newsletter is not trustworthy unless verified by their own independent research. Also, because events and circumstances frequently do not occur as expected, there will likely be differences between the any predictions and actual results. Always consult a real licensed investment professional before making any investment decision. Be extremely careful, investing in securities carries a high degree of risk; you may likely lose some or all of the investment.