T-Mobile believes customers are on board with price increase

There was quite a ruckus about T-Mobile’s price hikes online but the company nonetheless reported a strong first quarter. It did lose slightly more customers than it did in Q1 2024 (0.91 percent vs 0.86 percent), but the churn rate was lower thanVerizon’s. However, considering the infamous price hike came towards the end of the first quarter, its effects will be more visibly reflected in Q2 results. T-Mobile doesn’t seem worried though.In March, T-Mobile raised prices for some customers on its outdated or legacy plans. When asked if the company expects to report a higher churn rate — the percentage of customers who leave — CEO Mike Sievert shrugged it off. He says that this was the first price increase of its kind in more than a decade, which is why customers readily accepted it.

The company’s communication strategy also made customers more accepting of the price change, per Sievert. He also says that the increase only affected some of its customers, but made no attempts to underestimate the actual number, noting that millions of legacy plans were affected.The churn rate was in line with the company’s expectations. Perhaps it also helped that this was a two-stage price hike, so everyone was not affected at the same time.

Sievert also pointed out that the churn rate was higher across the industry, and though he tied it to the finicky economic conditions, we think it’s worth mentioning that all major carriers have raised prices in recent times one way or the other, so it’s not hard to make a connection here.

Sievert, like other execs in the industry, believes customers are better off than they were some years ago. They are “experiencing three times more data and four times better speeds across the industry” compared to five years ago.

This seems to be the new messaging adopted by industry bigwigs. They have been stressing that while customers may think prices have gone up, they are not necessarily paying more for the core phone service as prices have gone up because of added perks.

Some customers may think that execs are out of touch with reality here, while others may agree. For instance, as far as T-Mobile is concerned, many customers are sticking with the company despite the price increase because either the alternatives aren’t much better or because even after the hike, they are paying less than they would if they switched to another carrier.

It’s also worth remembering that T-Mobile customers aren’t necessarily angry at the price hikes. Instead, they accuse the company of going back on its promise of never raising prices.