T-Mobile has recently implemented significant policy changes as it battles shifting customer behavior and heightened competition. It also replaced its CEO last month, prompting the company to head in a new direction.
For example, in late October, the company began requiring customers who wish to set up payment arrangements for past-due balances to do so through the T-Life app, rather than through in-person visits at a T-Mobile store or the company’s automated phone system.
That same month, it also began warning customers that they would lose their autopay discount if they made early payments with a credit card.
By November, T-Mobile increased its late fee for customers who don’t pay their bills on time. It also retired its JUMP! On Demand program on Dec. 1.
The changes follow T-Mobile’s revelation in its latest earnings report that its postpaid phone churn (the number of customers who cancel their phone service) increased by 3 basis points year-over-year during the third quarter of this year.
The heightened loss of customers occurs during a time when more Americans are exploring alternative options for phone services as they battle higher costs.
T-Mobile recently noticed more customers pulling the plug on phone service.
Shuttershock/Helen89
Why U.S. consumers switch phone providers:
- Approximately 90% of consumers would consider alternatives to traditional carriers.
- About 85% consider cost to be a primary factor in selecting a mobile provider.
- Also, roughly 46% rank a lower-priced plan as their top reason for switching providers, while 33% prioritize better network coverage.
Source: Oxio
“Our research exposes a significant gap between what U.S. consumers want from their mobile services and what traditional carriers currently offer,” said Oxio CEO Nicolas Girard in a press release. “While connectivity itself remains essential, consumers are increasingly drawn to new possibilities in how these services could be delivered and experienced.”
T-Mobile elongates payment plans for some devices
During an earnings call in October, then-T-Mobile CEO Mike Sievert flagged that the entire telecom industry is experiencing elevated churn 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.
“Now we’re starting to round-trip those three-year plans, and customers are rolling off those at a normal pace,” he said. “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 to start charging customers for a free offer
Now, T-Mobile is starting to follow in the footsteps of its competitors. The phone carrier has quietly extended its monthly payment plans from 24 months to 36 months for some of its new wearable devices, such as the Pixel Watch 4 and Galaxy Watch 8, according to its website.
This change was previously spotted for tablet devices as well, earlier this week, but it appears that T-Mobile recently switched back to 24-month payment plans for these devices.
While extending payment plans to 36 months will decrease the amount of money customers will be required to pay per month for those new devices, it keeps them tied to their plans longer, making them more susceptible to possible taxes and fee increases.
More Telecom News:
- T-Mobile announces free offer for Verizon and AT&T customers
- Verizon CEO sounds alarm on why customers are leaving in droves
- Spectrum raises red flag on cause of fleeing customer problem
Some consumers took to social media platform Reddit to express concern that T-Mobile’s latest change will soon expand to more devices, such as phones.
“I’m not sure why I’d lock myself into a 36 month contract for an iPhone when I could just go direct to Apple and pay it off in 24 months with no interest and not be locked to a carrier,” wrote one Reddit user.
“When they start 36 months across the board, I’m de-boarding T-Mobile. Or I’m just going to buy my own phone somewhere else,” wrote a T-Mobile customer.
“At this point I’m just going to start getting my phone from Apple,” wrote another Redditor.
Americans are holding onto their devices longer
The move from T-Mobile comes after AT&T switched to 36-month installment plans for new devices in 2021, and Verizon followed suit a year later.
The growing popularity of 36-month payment plans for new devices attached to phone carriers coincides with a trend in which more Americans nationwide are holding onto their phones for over two years as prices rise, according to a recent survey from Reviews.org.
How Americans view phone upgrades:
- The average American pays $634.35 for their phone. This is significantly less than the current retail prices of the latest premium phones, which are over $1,000.
- Also, the average American upgrades their phone about every 29 months.
- The top three reasons Americans upgrade their phones are due to the need for faster performance, battery issues with their current device, and a desire for new features.
- Only around 6% of Americans are willing to upgrade their phone due to a trade-in deal or a better contract option.
Source: Reviews.org
In an interview with USA Today, Kelly Huh, a staff writer at Reviews.org, said that the survey results indicate that consumers are finding alternatives to having the latest phones.
“It shows that people aren’t going for the latest and greatest phones,” said Huh. “They’re getting a phone used, or getting a hand-me-down.”
Related: AT&T sues T-Mobile for bold new tactic to lure customers
