Quiver Quantitative - T-Mobile (TMUS) US, identified by its ticker symbol TMUS, recently announced its decision to retract a strategy aimed at transitioning some users to higher-priced wireless services, a move motivated by significant customer feedback. The initial proposal, which came to light via Reddit discussions, entailed pushing customers on select older plans to transition to newer, feature-rich tiers. These tiers would generally impose an extra charge ranging from $5 to $10 per line. However, the plan also provided customers an opportunity to reject this transition, requiring them to reach out to T-Mobile to voice their choice.
CEO Mike Sievert, addressing the matter during the firm's Q3 earnings call, remarked, "I think we’ve learned that particular test cell isn’t something that our customers are going to love." He further disclosed that although originally conceived as a trial, the strategy is no longer being pursued due to the considerable feedback they received. While the company had intentions to alert customers of these impending changes last week, this move was deferred multiple times as customer responses continued pouring in.
Mike Katz, holding the position of Marketing President at T-Mobile, indicated the company's determination to continue exploring fresh pricing strategies, simplifying its product lineup. This reflects a trend in the industry, with Verizon (NYSE:VZ) previously refining its assortment of unlimited data plans to foster clarity and spur growth. Post the expiration of several state and federal accords related to its Sprint acquisition in 2020, T-Mobile has enjoyed more latitude in modifying its wireless plans. While the company has generally abstained from matching the pronounced rate hikes by its competitors, occasional fee increments have been observed, especially as it seeks regulatory approvals on various fronts.
In a related industry move, to persuade clientele to switch to contemporary plans with elevated price points, certain firms have strategically hiked prices of older plans. For instance, Verizon's recent decisions to elevate rates and cease particular discounts, dubbed "targeted pricing actions", are projected to contribute an impressive $1 billion to its 2023 revenue.
This article was originally published on Quiver Quantitative