Wireless provider T-Mobile has reversed its plan to move some of its long-time customers to newer, more-expensive tiers.
The plan leaked several weeks ago after documents from a customer support portal used by T-Mobile associates were posted to the social media website Reddit. The documents revealed some legacy T-Mobile customers on older plans, including Magenta, T-Mobile One and Simple Choice, would be migrated to newer service tiers that offered comparable (or, in some cases, better) features at higher prices.
The migration would be automatic for some T-Mobile customers, though they would have the option of opting out before the change and could even switch back to their older, grandfathered plan after the migration, according to the documents.
The plan triggered a wave of criticism against T-Mobile, which has spent much of the last decade positing itself as a customer-friendly wireless carrier. Last week, The Desk reported T-Mobile was likely to abandon the migration following the customer backlash — something that was confirmed during T-Mobile’s quarterly earnings call on Wednesday.
“We tend to do tests and pilots of things quite a bit to try to figure out what’s the right answer,” Mike Sievert, the CEO of T-Mobile, said during an early morning conference call with reporters and investors. “In this case, we had a test to try to understand customer interest in and acceptance of migrating off old legacy rate plans to something that’s of higher value. And then it leaked, and it leaked as if it was a broad national thing — and it kind of wasn’t.”
Sievert complained that press coverage of the planned test was “erroneous,” though didn’t specify what he felt was wrong about the numerous reports about the leak. Still, he said the company didn’t “think we have to do that test because…we did get plenty of feedback thanks to the erroneous context of the leak,” nearly all of which was negative.
“I think we’ve learned that particular test cell isn’t something that our customers are going to love,” Sievert affirmed.
By the Numbers: T-Mobile Q3 2023 Earnings
- Total Revenue: $19.252 billion (-1.1%)
- Service Revenue: $15.914 billion (+4%)
- Postpaid Service Revenue: $12.288 billion (+6%)
- Postpaid ARPA: $139.83 (+1.5%)
- Postpaid ARPU: $48.93 (+0.1%)
- Prepaid ARPU: $38.18 (-1.7%)
- Total Customers: 117.91 million (+5.5%)
- Total Internet Customers: 4.235 million (+99.6%)
(Source: T-Mobile Q3 2023 earnings report; percentages are on a year-over-year basis.)
Mike Katz, T-Mobile’s Chief Marketing Officer, said the company still feels its new plans — called Go5G and Next — provide “hundreds of dollars in value for customers on a monthly basis,” with benefits like complementary Netflix and in-flight WiFi access on supported airlines, extended free trials of Paramount Plus and Apple TV Plus, and access to the company’s loyalty and rewards program T-Mobile Tuesday.
“In a time when the market and customers are so focused on device value, there is not a plan in the industry that gives customers more flexibility and more value on device than the Go5G plans do,” Katz said.
Toward the end of his comments, Katz affirmed T-Mobile might eventually conduct limited tests similar to the planned migration “because it’s been a consistent practice throughout the entire Un-carrier journey so that we get it right for the experience for our customers,” though he offered no specifics on what those tests could look like.
On Wednesday, T-Mobile revealed it brought in $15.9 billion in service revenue during its third financial quarter of the year, up 4 percent compared to last year. Revenue attributed to its postpaid consumer and enterprise business clock in at $12.3 billion for the quarter, up 6 percent on a year-over-year basis. The company’s profit for the quarter was $2.1 billion, up 322 percent compared to Q3 2022.
Total revenue was $19.252 billion, down 1.1 percent compared to last year.
Sources:
This story uses financial data from T-Mobile financial earnings report for the third quarter of 2023, as published on the T-Mobile Investor Relations website. Comments attributed to T-Mobile CEO Mike Sievert and CFO Mike Katz are from a transcript of a conference call with investors and reporters that followed the release of the company’s financial disclosure report on Wednesday. Information on T-Mobile’s plans to migrate some legacy customers to newer plans is based on prior reporting at The Desk, with research from articles published by Fierce Wireless and The Mobile Report.
