T-Mobile Drops Plan to Shift Customer to Higher Tiers After Backlash

T-Mobile US has scrapped a program that would have required certain customers to switch to more expensive wireless plans.

The decision comes after the proposed changes faced backlash from customers, The Wall Street Journal (WSJ) reported Wednesday (Oct. 25).

The details of the planned program were leaked on Reddit earlier this month, causing a stir among T-Mobile users, according to the report. The plan would have shifted some customers to newer service tiers that offered more features but cost another $5 or $10, unless the customers contacted the company to opt out.

During the company’s third-quarter earnings call on Wednesday, T-Mobile CEO Mike Sievert acknowledged that the program was not well-received by customers, the report said. He stated, per the report, “I think we’ve learned that particular test cell isn’t something that our customers are going to love.”

Sievert emphasized that the program was initially intended as a test and that the company had taken customer feedback into consideration, the report said.

T-Mobile’s decision to abandon the plan comes as the company continues to evolve following its acquisition of Sprint in 2020, according to the report. With nearly 118 million customers, T-Mobile has been able to adjust its wireless plans more freely since many of the state and federal agreements tied to the merger expired earlier this year.

The firm had planned to notify customers about the potential service changes, but those notifications will no longer be sent, the report said. Instead, the company will continue to experiment with new price strategies to simplify its offerings. This approach aligns with the industry trend of streamlining and clarifying wireless plans.

PYMNTS Intelligence has found that cost is the top reason for retail subscription cancellations. Fifty-two percent of consumers cited cost as a reason for canceling a subscription in the past year, according to the “Subscription Commerce Readiness Report: Bridging the Gap Between Subscription Conversion and Retention,” a PYMNTS and sticky.io collaboration.

In an earnings release issued Wednesday, T-Mobile said it has raised its 2023 guidance. Among other metrics, the firm now expects to gain postpaid net customer additions of between 5.7 million and 5.9 million, up from its prior guidance of 5.6 million to 5.9 million.