Verizon and AT&T are escalating price war offering cheaper plans

Verizon and AT&T extended price war, that commenced with smaller carriers like Deutsche Telekom's T-Mobile USA and Sprint Nextel unit Boost Mobile, cutting their cost plans rates on Friday.

Verizon Wireless, the biggest US mobile operator, unveiled its intention to cut prices by 30% for voice customers. It was followed by similar price cuts from its main rival, AT&T Inc.

Verizon Wireless said on Friday that it was replacing a $99.99 voice plan with a $69.99 plan that includes unlimited phone calls and an $89.99 plan that also includes text messages, while it also required more customers to pay for data services.

AT&T plans to offer unlimited voice and data for $99.99, equating to a roughly $30 price reduction.

Verizon reported it was ending a data service plan for $19.99 a month for 75 megabytes of data downloads such as Web surfing. Instead the company is adding a $30 unlimited service plan for cheaper multimedia phones and offering a $9.99 per month plan for 25 megabytes of downloads.

Analysts consider AT&T and Verizon may be able to sidestep a margin-denting price war because their customers are willing to pay a premium for the latest phones, faster data services and general reputation for more reliable networks.

Some experts still believe the influence is limited. Thus, according to Pacific Crest Securities analyst Steve Clement, currently only about a million customers use Verizon's $99.99 a month unlimited voice service.