T-Mobile decides it's a bad idea to anger its most loyal customers
What you need to know
T-Mobile has scrapped plans to automatically migrate its oldest customers to newer, more expensive plans.
CEO Mike Sievert confirmed in an October 25, 2023 earnings call that its most loyal customers will still be offered the option to migrate, if they want.
Newer T-Mobile plans bundle Netflix, Disney+, Apple TV+, Apple Music, and other services for a higher price.
Over the years, T-Mobile went from a budget-minded carrier to a "value-minded" one, often bundling in streaming content services with its latest plans to entice users to spend a bit more each month. To give itself a boost, the company was planning to automatically migrate customers on legacy plans to these newer, more expensive plans.
For folks who are looking to keep their existing plans at a low cost, CEO Mike Sievert confirmed in an October 25, 2023 earnings call (per Ars Tecnica) that the company would no longer pursue this aggressive upgrade program. Sievert said the leaked plan was just a test and the data generated from that test showed the migration plan "isn't something that our customers are going to love."
Sievert described the migration plan as a way for legacy customers to migrate "off old legacy rate plans to something that's higher value for them and for us." That's certainly true in an age where both Netflix and Disney+ are raising prices every year, as bundling these services with mobile plans could save people money.
T-Mobile's latest Go5G Plus plans offer better value and lower prices than AT&T or Verizon, especially as you add more lines, but it's hard to argue with legacy plans that continue to offer family plans at $120 per month regardless of included services.
Despite the setback, T-Mobile still reported a 4% year-over-year revenue increase totaling $15.9 billion. T-Mobile recently laid off 5,000 employees as it continues to finalize all the pieces of the Sprint merger and said it has no further plans to lay off additional employees.
T-Mobile is also looking to expand its home internet offerings over the next year with additional fixed wireless access and a new line of fiber deployment. 5G deployment has helped T-Mobile expand into wireless home internet offerings. It's possible that these two new areas of service offering will help the company make up the difference in revenue it would have seen from pushing customers onto more expensive wireless phone plans, but the CEO says he's not "drawing any conclusions" just yet.
