T-Mobile, one of the big three phone carriers in the U.S., is facing the brunt of a growing consumer trend after rolling out price hikes this past year. The phone carrier is also battling tougher competition as its rivals double down on attracting customers with new device promotions and discounts.
In T-Mobile’s third-quarter earnings report for 2025, it revealed that it added 1 million new postpaid phone customers during the quarter, delivering record growth. However, its postpaid phone churn, the number of customers who cut their phone service, ticked up by 3 basis points year-over-year.
The slight increase in customer losses comes after T-Mobile rolled out several significant changes earlier this year that angered its loyal customers.
- In April, T-Mobile raised monthly prices for some of its older phone plans by $5.
- Also in April, T-Mobile hiked its Regulatory Programs & Telco Recovery Fee from $3.49 to $3.99 for voice lines and $1.40 to $1.60 for data-only lines.
- T-Mobile officially retired its Go5G plans in June and started removing taxes and fees from plan pricing.
- In August, T-Mobile booted select customers from older phone plans and placed them on its Go5G Plus plan.
T-Mobile is also facing criticism over some of its ties to prominent political figures. The company is facing a major consumer boycott due to its association with President Donald Trump and Tesla CEO Elon Musk, and its decision to cut its diversity, equity and inclusion policies in July.
The boycott, which is headed by the 2025 Stop the Money Pipeline campaign, encourages customers to cancel their T-Mobile contracts between Nov. 14 and Nov. 16.
T-Mobile CEO flags the cause of elevated churn in telecom industry
During an earnings call on Oct. 23, T-Mobile CEO Mike Sievert said that the telecom industry as a whole is seeing elevated switching behavior among wireless consumers due to “a number of different dynamics,” but partially because the company’s rivals recently switched from two-year to three-year payment plans.
“We’re just ending now as an industry a cycle where we did see industry churn, particularly at our two benchmark competitors, suppressed temporarily as they moved from two-year to three-year payment plans across the majority of their customers,” said Sievert on the call. “Now we’re starting to round-trip those three-year plans, and customers are rolling off those at a normal pace. What you’re seeing across the industry in 2025 is industry churn kind of returning to normative rates based on that dynamic and lots of other dynamics.”
Related: T-Mobile plans move that will push customers to upgrade phones
Sievert’s comments come after AT&T revealed in its third-quarter earnings report for 2025 that its postpaid phone churn increased by 14 basis points year-over-year during the quarter.
During an earnings call on Oct. 22, AT&T Chief Financial Officer Pascal Desroches blamed higher churn on heightened competition and customers reaching the end of device contracts.
“Postpaid phone churn was 0.92%, up 14 basis points versus a year ago,” said Desroches. “This reflects increased marketplace activity and, to a lesser degree, an increase in the portion of our customer base reaching the end of device financing periods, which normalized as we exited the quarter.”
Americans are sick of high phone plan prices
Many Americans are seeking lower-priced phone plan options as they face price increases for phone services. A recent survey from WhistleOut found that 42% of Verizon, T-Mobile and AT&T customers have seen their phone bills inflate in the past year, which is 7% higher than the average. Also 58% of these customers are contemplating switching to a different phone carrier as prices increase.
Due to high mobile plan pricing, all three phone carriers may lose about 230 million customers combined.
Phone carriers are also battling heightened competition from cable TV companies, which have been offering consumers discounts on bundled phone, internet and TV services.
According to recent data from MoffettNathanson, which was shared by Light Reading, Spectrum, Comcast, and Altice USA added 886,000 new phone customers during the first quarter of 2025, an increase from the 804,000 they added during the same quarter last year.
T-Mobile bets big on its “digital transformation” to keep customers happy
To attract and retain customers, T-Mobile is doubling down on its “digital transformation” initiative to tackle customer pain points and make switching easier.
“It’s a very complicated transaction involving trade-ins and valuing trade-ins and signing up for a two-year payment plan, picking a plan, getting a promotion against that plan, possibly a promotion against that device,” said Sievert. “People throw their hands up and say, ‘I need help.’ AI (artificial intelligence) is great at making the complicated uncomplicated.”
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During the call, T-Mobile Chief Operating Officer Srini Gopalan said that 75% of the company’s upgrades are now done on its T-Life, which has simplified the process.
Gopalan, who will become T-Mobile CEO on Nov. 1, is reportedly planning to make customers 100% dependent on its T-Life app to handle upgrades, new lines, account activations, etc., by January.
“I want all of you to know that I am committed to not only being the network leader of today, but also investing tirelessly to defend and widen the margin of our network leadership for tomorrow,” said Gopalan. “Let me talk a bit about digital transformation. The amount of friction and frustration we cause customers today because of our processes and the state of evolution in this industry is phenomenal. We have a huge opportunity to change that with our digital transformation.”
Dan Kline, co-editor-in-chief of TheStreet, believes that T-Mobile’s plan to make customers more dependent on its T-Life app to upgrade devices, sign up for new phone plans, etc., may mostly appeal to younger customers.
“I’m not sure that most people over a certain age think that’s easier,” said Kline. “I miss being able to go to a store and having them do it.”
Related: AT&T is suffering from an alarming customer problem
