The business stories that matter, by Fortune's Colin Barr
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February 19, 2008, 2:34 pm

Price war floors Verizon, AT&T

Can you spell price war? Investors in AT&T (T) and Verizon (VZ) sure can. Shares in the telecom giants dropped 4% in heavy trading Tuesday after Verizon rolled out a flat rate wireless plan and AT&T followed suit. The plans will let users make as many calls as they please nationwide for $100 a month. While that may sound like a nice price tag, the new plans could actually cut the companies’ profits from high-use subscribers, who often are stuck paying hefty fees for going over their airtime-use limit. “I’m betting [AT&T and Verizon] are making the flat-rate leap as a response to weakening sub growth trends of January-February,” telecom analyst Tero Kuittinen writes at RealMoney.com. “Both have been considering this move for a year or two; looks like something pushed them into pulling the trigger now.” If he’s right, that something might just be another sign that the consumer is pulling back.

My family has about 10,000 shares of AT&T stock. So for many years we have invested in AT&T or cingular. The service is so bad for this company, we have had two cell phones with them for over two years, we go to get the internet hooked up and it has been a fiasco with not end in sight since 12-24-07. If this is how they treat their long term customers and share holders, wer understand why there stocks are going down. But they still bill us and they still send dividends, just can get service or a person who doesn’t hang up when you ask could I have a corporate number. Thank you for your time.

Posted By Audrey Kahn Chicago, IL : February 26, 2008 5:24 pm

It seems like we have a couple of people that simply did not hear what they wanted to hear…

Posted By JW…Fayetteville, NC : February 19, 2008 10:13 pm

I agree with Eric (Raliegh, NC). AT&T service has a lot of catching up to do with Verizon.

Posted By Pradeep Parekh, Houston, TX : February 19, 2008 7:18 pm

verizon will come out on top for sure. they beat out att/cingular by far, besides having much better customer service

Posted By eric, raliegh, nc : February 19, 2008 4:50 pm

AT&T will continue to generate record amounts of customers. Buy now and reap the rewards after the 1st quarter update.

Posted By Jason Akron Ohio : February 19, 2008 3:44 pm
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Colin Barr covers business and finance for Fortune.com. Previously he was an editor at TheStreet.com and author of the weekly Five Dumbest Things on Wall Street column, and an editor at Dow Jones Newswires.
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