Shares of Leap Wireless International Inc. (LEAP) and MetroPCS Communications Inc. (PCS) fell after AT&T Inc. (T) unveiled a new, less expensive pre-paid plan, reigniting concerns over pricing power at the low end of the wireless business.

Earlier Friday, AT&T launched an unlimited plan for calls and text messages for $60 a month under its GoPhone pre-paid service. While not as low as the plans offered by Leap or MetroPCS, such an aggressive move by the telecommunications giant was seen as a threat to the smaller pre-paid players best known for their unlimited plans.

Leap fell nearly 7% to $16.08, while MetroPCS fell 4.5% to $8.

"While not directly competitive on price, this offer provides a stake in the ground for AT&T, and could ultimately result in even greater price competition across the segment," said William Power, an analyst at Robert W. Baird & Co.

While Leap and MetroPCS continue to show impressive growth, they have been hampered by a flood of entrants in the area. With less growth at the high end, which is dominated by AT&T and Verizon Wireless, players are scrambling to get at customers on the low end. The industry continues to benefit from customers looking to avoid long-term contracts and pay less each month.

Most notably, Sprint Nextel Corp. (S) has pushed its Boost Mobile product to great success. America Movil S.A.B. de C.V. (AMX) unit Tracfone is also seen expanding its Straight Talk service, which undercuts most of the competition. The service is powered by Verizon Wireless, which is jointly owned by Verizon Communications Inc. (VZ) and Vodafone Group Plc (VOD).

The pricing pressure, which has caused prices to drop rapidly over the past year, is expected to continue, industry observers say. MetroPCS and Leap's most popular plans hover between the $40 and $50 level, but they have seen more features and price cuts and both get aggressive with expansion.

"The holidays usually bring new prices in wireless," said Philip Cusick, an analyst at Macquarie Securities, noting that it has already been a "crazy year."

A Leap spokesman declined to comment on AT&T's plans. MetroPCS wasn't immediately available for comment.

-By Roger Cheng, Dow Jones Newswires; 212-416-2153; roger.cheng@dowjones.com