Arms dealers profit from warring parties killing each other. Well, telecoms are at war, and I want to be an arms dealer. I'm going to short AT&T (NYSE:T), Verizon (NYSE:VZ), Sprint Nextel (NYSE:S), and T-Mobile parent Deutsche Telekom (NYSE:DT) in Motley Fool CAPS.
Here's why: Last week, Verizon announced a $70-per-month unlimited calling plan. AT&T has since matched that rate. Sprint Nextel, meanwhile, has a plan that allows customers to call any cell phone in the U.S. for free.
What we have yet to see, but which I think is coming, is a rollout of unrestricted, no-contract plans. "Telco is a commodity business. And like all commodity businesses -- think retail and airlines -- when one provider changes the game, the others follow. Expect every carrier to eventually follow suit here, as well," I wrote in October.
Even if it's only T-Mobile that has gone this route -- the nuclear option, you might call it -- every one of these price-matching announcements is further proof that telcos have ceded control to Apple (NASDAQ:AAPL), Research In Motion (NASDAQ:RIMM), Google (NASDAQ:GOOG), and their other smartphone partners; albeit begrudgingly, I'm sure.
But that's my take. Now it's your turn to weigh in. Is it time to short the telecom industry? Am I making too much out of the announcements? After all, some customers may actually be paying more after the changes. Please vote in the poll below. You can also make your voice heard using the comments box below.
