Increased competition in the telecom space is causing a tectonic shift in how investors feel about the entire sector.
Investors' bearish outlook on telecom companies appears to stem from the heavy costs of ever-increasing data traffic on cellular networks, the Journal reported. What's more, the big cell phone service providers seem to be losing pricing power over the same networks because of increased competition on data plan prices, the paper added.
A large part of AT&T and Verizon's networks are in family or business plans that make it more difficult for the consumer to switch carriers. However, even with the difficulties, Verizon announced last week that its customers were leaving at a higher rate in the current quarter than in the prior year. AT&T also announced a similar situation.
This month announced a plan to cut customers' bills in half if they switched over from AT&T or Verizon.
T-Mobile, the fourth rival in the space, is also aggressive, offering unlimited 4G LTE data plans for two lines for $100.