T-Mobile is facing increasing pressure as competition from other wireless carriers intensifies. The company has seen an increasing number of mobile phone customers leave in recent months, prompting its chief executive to plan major changes to help reverse the trend.
T-Mobile revealed in its latest earnings report that it added 962,000 new postpaid phone customers in the fourth quarter of 2025, during which the carrier rolled out iPhone deals and free phone lines in anticipation of the holiday season. However, the number was lower than the 981,330 new additions expected by analysts polled by FactSet.
While AT&T launched competitive trade-in offers in the fourth quarter to attract new customers, Verizon performed more aggressively. Verizon, for example, dropped deals like four phone lines for $100 a month and started offering a free iPhone 17 or Samsung Galaxy S25 and added new lines.
“One of our major competitors has increased device-centric competitiveness as they try to capture some of the growth in postpaid phones,” T-Mobile Chief Financial Officer Peter Osvaldik said in a statement to Reuters.
T-Mobile’s postpaid phone customer churn rate also hit 1.02% in the fourth quarter, 13 basis points higher than the segment’s reported churn rate in the third quarter.
T-Mobile’s decision to raise prices and make major changes to cell phone plans last year frustrated customers and led to increased churn.
Amid economic pressure, consumers across the country have become more sensitive to the amount they spend each month on cellphone plans. A WhistleOut investigation last year found that T-Mobile could lose as many as 75.9 million customers due to overpriced cellphone plans.
During a Feb. 11 earnings call, T-Mobile CEO Srini Gopalan said customer churn increased across the wireless industry last year, largely due to expiring device contracts for postpaid phone customers.
“It’s clear that NPS (Net Promoter Score, a measure of customer loyalty) and churn are highly correlated,” Gopalan said. “I think what we’re seeing in ’25 is also the normalization of churn across the industry. Because you’ve had 36-month contracts and suppression of churn over the years.”
Gopalan hinted that T-Mobile will make several bold pricing changes as the company faces a surge in customer churn.
First, he suggested that T-Mobile is re-evaluating how it offers device subsidies (or phone discounts) to customers in the future, taking into account the intensity of competition and the fact that phones are getting more expensive and lasting longer.
Currently, T-Mobile’s device subsidies are paid out as bill credits over a 24-month period. For example, the carrier’s current iPhone 17 deal gives customers who add the new line to their Essentials plan a roughly $830 credit spread over two years (about $34 per month), essentially giving them the phone for free.
“We will always compete with mobile phones when it comes to subsidies,” Gopalan said. “This really shifts the focus of the conversation to things that create ongoing value.”
Mike Katz, T-Mobile’s president of marketing, strategy and product, said on the earnings call that customers expect more than just free phone offers when it comes to subsidies.
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“[We]can’t make the iPhone any more free than it already is,” Katz said. “The fact is, customers buy a phone at a point in time that, you know, happens every three years. During that time, they’re using wireless service every day. We think customers expect and demand more from us than just a free phone offer every three years.”
In addition to T-Mobile revisiting its approach to subsidies, Gopalan warned that customers may see more pricing changes in the future, especially for traditional cell phone plans, as the company offers more value.
“From time to time we look at specific cases and we did one in January where we thought there was a case in the legacy books to look for price changes and those were really optimizations of the rate plan,” he said.
T-Mobile will also continue to push forward with its digital transformation plan, which reportedly involves making customers more reliant on its T-Life app for important account changes such as phone upgrades, adding new lines, and more. Gopalan claims that the change has so far been successful in improving customer satisfaction.
“When we started this journey, 22% of upgrades were done through T-Life, and they were assisted, where an agent showed the customer what to do,” Gopalan said. “That was in the fourth quarter of 2024, just over a year ago.”
“Today, 73% of our upgrades are done on T-Life, and 39% of those upgrades are done on our own without assistance,” he continued. “This can lead to huge efficiencies and satisfaction.”
T-Mobile expects its artificial intelligence and digital initiatives to save $3 billion by 2027. Gopalan said that while there have been some recent concerns and layoffs, these moves are not motivated by layoffs.
“We haven’t pushed forward with digitalization and artificial intelligence, and we’re going to lay off so many people because we need the costs that come from that,” Gopalan said. “That’s why this is a three-year journey: The first step is building capabilities, getting our IT in place, getting digital in place. The second step is customer adoption, which is really working with customers to move them to assisted digital. The third step is now scaling.”
The changes come after T-Mobile recently launched several new lower-priced phone plans in an effort to attract and retain price-conscious customers.
T-Mobile also recently launched a free real-time translation service that uses AI to translate conversations in more than 50 languages in real time for any call made on the T-Mobile network.
Clearly, T-Mobile understands that it must double down on consumer satisfaction if it wants to succeed in the challenging wireless market.
Industry analyst Jeff Kagan said that while T-Mobile has “achieved solid growth” over the years, “resistance to change is brewing,” according to a recent press release.
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“There are always winds of change in the wireless and telecommunications industry,” Kagan said. “Yesterday’s leaders may lose ground to competitors with newer, stronger or more innovative ideas.”
Kagan emphasized that companies need to change their strategies to win in the rapidly changing telecommunications industry, with artificial intelligence being one of the main areas of focus.
“Looking ahead, success requires an updated, focused, precise and creative growth strategy, with artificial intelligence and other new ideas at the center of the storm,” he said.
New data from Market Force Information shows that while T-Mobile faces increasing competition from top rivals Verizon and AT&T, it also faces threats from smaller wireless carriers such as mobile virtual network operators (MVNOs), which are increasingly popular with consumers for their lower plan prices.
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approximately 65% of U.S. consumers signed up for and paid for an average cell phone plan from Verizon, T-Mobile or AT&T over $100 Monthly service.
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In key customer experience benchmarks, T-Mobile wins 42.8% Overall brand performance score.
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smaller wireless carriers significantly better than Larger, consumer mobile phones 73% Ratings and visible ratings 63.9%.
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In consumer loyalty rankings, T-Mobile ranked just above the 25th percentile and ranked close to lower level provider. In comparison, smaller operators such as Consumer Cellular, Cricket and Visible Ranking or above 75th percentile.
Source: Market Forces Information
David Murray, senior director of customer strategy at Market Force Information, highlighted in a press release that smaller operators outperform their larger competitors when it comes to loyalty and customer experience.
“The market is clearly shifting toward smaller, more agile wireless carriers that can deliver a superior customer experience,” Murray said. “While cost and coverage will always be key factors, today’s consumers place greater emphasis on convenience of service and overall satisfaction with their provider. The top-performing companies set the benchmark in customer experience and loyalty.”
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This article was originally published by TheStreet on February 17, 2026, and first appeared in the Retail section. Click here to add TheStreet as your preferred source.
