Marcelo Claure, the new CEO at Sprint (NYSE: S), is seeking a new twist on an old axiom: “If you can’t join them, beat them.” 

For a number of years the wireless carrier had been seen as a weak player, scoring low marks in terms of wireless network reliability, network coverage and customer service.  Repeated attempts to implement pricing plans that were just a bit cheaper than those offered by rival’s Verizon (NYSE: VZ) and AT&T (NYSE: T) simply failed to deliver any market share gains.

#-ad_banner-#In the first quarter of 2014, Sprint controlled just 16% of the U.S. market, roughly half of the market share of Verizon and AT&T, according to Statistica.com. In the second quarter, Sprint ended up in an even deeper hole: While Verizon and AT&T each added more than one million net new subscribers, Sprint lost 245,000.

Low market share is a real problem in an industry that is characterized by high fixed costs. Building and maintaining national wireless networks costs billions of dollars, and you need a lot of customers to help defray those costs.

Yet Sprint is feeling the effects of negative overhead leverage. In 2013, the carrier lost 1.7 million net customers.  To stem the tide, Sprint recently cut its pricing plans.  A typical family plan can exceed $150 at Verizon and AT&T, but consumers that switch to Sprint by the end of next month can have the same plan for $100.  If the promotion succeeds in adding customers, it would likely be extended.  Sprint’s $60 a month unlimited data plan for individuals is now the lowest in the industry as well.

Analysts think that lower prices and offers to reimburse new customers for cancellation charges to switch carriers will help alter the market share dynamic. Credit Suisse, for example, believes that without any pricing changes, Sprint has no chance of taking meaningful market share. Now, the carrier may generate up to two million net new subscribers in both 2015 and 2016.

Yet that won’t translate into higher profits. These analysts actually trimmed their 2016 EBITDA (earnings before interest, taxes, debt and amortization) forecasts for Sprint by around $500 million to roughly $8 billion, as lower revenue per average user (ARPU) offsets share gains. More to the point, Verizon and AT&T will need to re-visit their pricing strategies if they start to see market share slippage. And though Verizon maintains industry-leading network quality and coverage, it actually has the most to lose from deepening price wars.

Over the past year, Verizon lowered prices for new customers on some plans in the face of price wars from T-Mobile US, Inc. (NYSE: TMUS). Yet, pricing for existing customers was unchanged. That has led to some grumbling among Verizon’s existing customer base.  And, more importantly, a key technology factor could play a key role in customer defections.

T-Mobile and AT&T both use a wireless protocol known as GSM, which means that AT&T customers could defect to T-Mobile and still use the same phones. Sprint and Verizon both use a technology known as CDMA. “Historically, customers that have switched across the industry have switched between carriers with the same technology,” note Credit Suisse’s analysts. Translation: Sprint will be going right after Verizon with its promotional efforts.

Price wars come at a bad time for Verizon. Strength in the company’s wireless division has been offsetting a steady deterioration in its wireline business, which was once a cash cow. Merrill Lynch’s analysts think the ongoing drawdown in wireline revenues means that Verizon’s free cash flow will shrink from $22 billion last year to $14 billion by 2016. And that forecast was derived before the advent of fresh wireless price wars.

Meanwhile, prices could fall even more in coming years. That’s because capital-intensive industries such as these are often characterized by high upfront spending and fairly high costs to customers. But once those heavy investments have been made, price wars become the norm as operators seek out every last ounce of market share. Europe has already experienced this. The region saw its wireless industry ripen earlier and is now noticeably cheaper for consumers. As this article in Bloomberg notes, the major European wireless carriers already have much lower gross margins than their U.S. counterparts.

Risks to Consider: As an upside risk, Sprint could bungle this new initiative, as it has on many occasions in the past. Then again, a newly-installed management team means you shouldn’t simply expect more missteps, which have characterized Sprint in the past.

Action to Take–>  Look for Sprint to aggressively promote its new pricing plans in September, and for analysts to issue their early reads on possible market share shifts. Few expect Verizon to feel any impact just yet, but if Sprint gains traction, then falling EPS estimates—and a falling share price—are the likely result.

If Sprint plays its cards right, it could come to dominate this market. In that case, we would deem Sprint a “Game-Changing Stock.” My colleague Andy Obermueller specializes in finding the world’s next great market disrupters. He just released a report detailing some of his best ideas. To check out, “The Hottest Investment Opportunities For 2015,” click here.