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Verizon and AT&T dial up wireless plan wars

By Blake Ellis, contributing writer


NEW YORK (CNNMoney.com) -- Verizon Wireless said early Friday it will lower prices on its unlimited wireless plans.

Later in the day, AT&T followed suit.

Verizon cut its unlimited family talk and text plan from $229.99 to $149.99 and its nationwide unlimited voice plan was reduced to $69.99 from $99.99.

An unlimited family voice plan will cost users $119.99, down from $199.99, and nationwide unlimited talk and text plans were lowered to $89.99 from $119.99.

"Prices either stayed the same or were lowered for unlimited usage," said Brenda Raney, a Verizon Wireless spokeswoman.

The lower prices will be offered Monday. Existing customer contracts will not be affected, but customers may switch over to any of the new plans without a penalty or contract extension.

After the announcement, AT&T said it will cut back prices on unlimited plans as well and the new rates will also be available Monday.

AT&T will lower the price of each of its unlimited plans by $30, leaving the two companies neck and neck yet again.

"We are committed to providing more value to our customers and staying competitive in the marketplace," said AT&T spokesman Fletcher Cook. "These new plans make it even more attractive to choose AT&T."

"The reason AT&T had to lower its prices is because its brand reputation is taking a lot of hits," said Doug Helmreich, program director at consultancy CFI Group. "It's predictable just because they are a big player in the market and they can't not respond."

And because competitors won't want to be left in the dust, other wireless service providers including Sprint Nextel (S, Fortune 500), T-Mobile USA are likely to hop on the bandwagon, said Daniel Hays, wireless expert and partner at consultancy PRTM.

But Verizon's smaller -- but growing -- competitors may be even more affected by the price reductions.

"This is going to put continued pressure on some of the smaller players like Leap Wireless (LEAP) and MetroPCS (PCS) who have really been taking the lead in this pricing competition," Hays added. "They're going to be the ones who are going to have primary impact." To top of page

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