The Wall Street Journal: Bye bye discounts? Telecoms appear set to jack up smartphone prices

The wireless price war may have reached detente.

After years of slashing prices, offering stunning promotions and undercutting each other to grab new subscribers in a market that has reached near saturation, the four largest U.S. wireless carriers have reported second-quarter results that suggest prices have stabilized. Some operators are even talking about how price rises could be in the future.

Sprint Corp. S, +2.33%  , which has been offering half-off promotions, said the time might be coming to stop discounting and start increasing rates. Verizon Communications Inc. VZ, +1.00%   already raised prices on its service plans, while T-Mobile US Inc. TMUS, +0.26%  , which stoked the competitive fire of recent years, raised prices last year, and now says it is open to making a similar move going forward. AT&T Inc. T, +1.67%   hasn’t changed its pricing in almost a year.

“The price war has played itself out,” said Angelo Zino, an equity analyst with S&P Global, noting that switching customers away from smartphone subsidies has reset the fee structure. “We saw an interesting couple of years.”

For all carriers, the average revenue per user, a metric used to calculate how much the carriers earn from their subscribers, has plateaued after dropping steadily since late 2013, according to data from UBS Group AG. In the second quarter, the metric fell to $50.20, down from $60.70 in the third quarter of 2013, but only down slightly from $50.40 in the first quarter, according to UBS data.

An expanded version of this report appears on WSJ.com.

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