New T-Mobile Pricing Could Damage Its Profits

24/7 Wall St.

T_Mobile_logoInvestors do not think much of T-Mobile US Inc. (NASDAQ: TMUS), which probably means they do not think well of its aggressive price cutting plans. The carrier’s share price is up less than 6% over the past year, compared to a nearly 13% for the S&P 500.

The latest of these plans is aimed at small businesses. T-Mobile now offers what it says are better features than those of larger carriers. The pricing may be an enticement. However, the most powerful argument against use of the plans is T-Mobile’s low ratings for service among America’s four largest carriers. In the recent J.D. Power U.S. Wireless Network Performance Study, T-Mobile did poorly, although it topped Sprint Corp. (NYSE: S) in several categories. T-Mobile barely did better in a recent RootMetrics report. T-Mobile may believe it can price cut its way to more subscribers, but that is a dicey plan.

ALSO READ: The 10 Top US Wireless Trends for the Big 4 Carriers

Perhaps the…

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