Wireless phone service prices are falling at fastest rate ever recorded

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From the Wall Street Journal:

Customers are used to cellphone bill shock, but not like this.

The cost of U.S. cellular service is rapidly plunging, reversing years of increases that have squeezed consumers’ budgets and generated huge profits for wireless companies.

Americans are using their smartphones more than ever to stream videos, surf the web and browse Facebook. But telecommunications companies are losing their power to raise prices for using their networks, in part because the U.S. cellphone market is nearing saturation. That has kicked off a vicious price war among the four national wireless carriers.

The consumer-price index for wireless phone service, an indicator of current offers from cell phone service providers, dropped 12.5% in May from a year ago, according to the Labor Department. The index earlier fell 13% in April, the largest decline in the history of the category, prompting Federal Reserve Chairwoman Janet Yellen to say earlier this month it was a factor in the country’s low inflation.

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