Tariff and Other Economic Concerns Prompting Customer Churn: T-Mobile
T-Satellite service will start in July at $10 per month, T-Mobile CEO Mike Sievert said late Thursday on a call with analysts to discuss Q1 results for the carrier (see 2504240062). Sievert also expressed concerns about Trump administration tariffs and said that if they result in more expensive smartphones, consumers will have to pay the extra costs.
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T-Mobile unveiled its beta testing of T-Satellite with Starlink during the Super Bowl in February (see 2502100002), though how much carriers will charge for direct-to-device service remains an open question (see 2504170043). The service is included at no charge as part of T-Mobile’s latest premium plans, unveiled last week (see 2504220022). It will also be offered to AT&T and Verizon customers at $10 a month, Sievert said.
Tariffs are “a moving target,” Seivert said. “We certainly understand the goals of the administration,” but “it's not clear how much this is going to affect the handset market.” He added, “Taking on something big on the tariff front is just not something our business model is interested in trying to do or able to try to do.” He predicted that consumers might hold their phones even longer than they already do in the face of high tariffs.
Churn was elevated across the wireless industry in Q1, Sievert said. “People are, in a time of uncertainty about the future, grabbing what they can afford now.” He said he’s not sure whether switching carriers is more tied to concern about tariffs or the overall economy.
Fiber was on analysts’ minds during the call. T-Mobile recently wrapped its purchase of a stake in Lumos (see 2504010034), while its acquisition of part of Metronet is pending. Sievert said T-Mobile is “out there kicking the tires” on other fiber buys. “Our appetite is limited, and it has to be just the right thing,” he said. “We've kind of shown our preference for pure-play fiber. It doesn't mean we're going to limit ourselves to that.”