Telecoms Are Hit by Cellphone Cost Worries

What difference does a month make? In telecom, the answer is about $45 billion. That’s how much market value Verizon Communications, AT&T, Sprint and T-Mobile US have lost collectively since mid-November amid a fast-moving reassessment of the industry’s value by investors. The lost value is greater than the current market capitalization of Sprint and T-Mobile combined, and it reflects concern that cellphone service will be costlier to deliver and less lucrative to sell. Two events sparked the change of heart. The first was the government’s ongoing sale of wireless licenses, which kicked off Nov. 13 and as of Dec 12 had drawn more than $43.7 billion of bids. The other was a warning from Verizon that competitive pressure was forcing it to offer discounts that would hurt its profits.