Verizon is bringing back its unlimited data plans. That’s great news if you’re a Verizon customer, but it’s bad news for Verizon investors.
Verizon （Uighur） Shares of the company fell nearly 1.5 percent in early trading Monday. So far this year, the company’s shares have fallen about 10 percent, making it the Dow’s worst performer in 2017.
Verizon’s move makes it clear that the company must pull out all the stops to stay competitive with wireless rivals. AT&T （television）, sprint （Era） and T-Mobile （TMUS）.
“Both T-Mobile and Sprint have successfully taken additional market share from Verizon with their unlimited services in recent months,” Morgan Stanley analysts wrote in a note Monday morning.
That may explain why shares of T-Mobile and Sprint (now controlled by Japanese tech group SoftBank), which have also been mentioned as possible merger partners, have risen this year, while Verizon’s stock has fallen.
But the new telecom price war isn’t the only problem facing Verizon.
AT&T’s recent acquisition of satellite broadcaster DirecTV makes Ma Bell more competitive in the race to control people’s living rooms than Verizon, which offers its own FiOS broadband TV service.
RELATED: Verizon reinstates unlimited data plans
AT&T is also investing more in content, with plans to acquire CNN’s parent company Time Warner （Twix）Verizon already owns AOL and is seeking to acquire Yahoo’s core assets to bolster its own digital content offerings.
but Yahoo （Yoo） The deal could fall apart as Yahoo’s massive data breaches over the past few years have come to light.
Yahoo recently said it hopes to close the Verizon deal in the second quarter of this year. The deal was originally expected to close in the first quarter.
However, in its most recent earnings report, Verizon said only that it “will continue to work with Yahoo to assess the impact of the data breach” — which doesn’t mean the deal will be completed anytime soon.
Verizon has a lot going on, and that could make investors nervous. In addition to the Yahoo deal, the company is acquiring XO Communications’ fiber network. It’s also selling its data center business to Equinix （Equalizer）.
There have also been rumors in the past few weeks that Verizon might even consider acquiring the cable provider Charter Newsletter （CHTR）.
That’s probably more than Verizon can realistically afford right now. But given how competitive the wireless industry is today, Verizon can probably take whatever it takes.
Anything that gives Verizon an edge over AT&T, Sprint and T-Mobile is a possibility.
RELATED: Charter shares rise on report that Verizon may acquire Charter
It’s worth noting, though, that AT&T’s stock is also down about 5% this year. Verizon and A&T have something in common that Sprint and T-Mobile don’t — Verizon and AT&T pay huge dividends.
Companies with higher dividend yields have underperformed since the election of Donald Trump, as investors bet that Trump and the Republican Congress will deliver a massive stimulus package that could be fueled in part by debt.
That’s caused bond yields to rise — and made stocks of companies with high dividend payout ratios, such as Verizon, much less attractive.
The Federal Reserve is also expected to raise interest rates several times this year. That could push bond yields higher further.
As a result, Verizon faces a number of significant challenges that could hurt its stock price this year.
Because of this, shares of Verizon (nicknamed “Big Red” because of the deep red color of its logo) are likely to see losses for the foreseeable future.
CNNMoney (New York) First published on February 13, 2017: 11:27 a.m. ET
