When then-T-Mobile CEO John Legere rolled out the original “Un-carrier” move back in 2013, he did more than just introduce a new plan feature – the removal of phone subsidies – he launched a movement.
Un-carrier became shorthand for a promise of more transparency and less of the carrier BS that the other companies employed. The company achieved this through a laser-focus on communication and consistent messaging. The result was a campaign that propelled the then-No. 4 carrier to a place where it now stands as one of the big dogs in the industry, winning legions of fans along the way.
Which makes this past week and a half, which saw T-Mobile scrambling to respond to the growing anger and confusion over plans to migrate subscribers to more expensive phone plans, so surprising. The move, which leaked on Reddit and was confirmed by numerous publications, including Cord Cutters News, is decidedly un-un-carrier of T-Mobile.
But perhaps this slipup was bound to happen, with T-Mobile acting more like one of the competitors it loves to mock. Back in 2019, T-Mobile rebooted the Un-carrier movement with New T-Mobile Un-Carrier 1.0, celebrating the upcoming merger with Sprint and incoming CEO Mike Sievert. Now, as the No. 2 largest wireless carrier, the company has restricted some of its best benefits behind its newest, and most expensive plans, fumbled with data privacy with numerous breaches, and has now dealt with the poor communication of this program.
Last week, T-Mobile confirmed it would start notifying customers as soon as Tuesday that they would be moved to a new plan (with an option to opt out), but that didn’t happen. The following day, T-Mobile changed its tune on the program, now calling it a “small-scale test.” It also pushed back the start date to a letter, unspecified time (check out the full breakdown here).
“Clearly a leak of any shift in plans versus a stated announcement reflects poorly on the carrier,” said Maribel Lopez, an analyst at Lopez Research. “T-Mobile obviously had to acknowledge that the data was real but didn’t have a story lined up to share how it would deliver new value.”
Excising Legacy Plans
Another element of T-Mobile’s early success were the aggressive plans it rolled out during the first few years of its Un-carrier movement. The original Simple Choice plans offered huge savings for large families that didn’t consume huge amounts of data. Later promotions and plans actually bumped up the amount of data they could consume and offered free lines.
These plans often undercut similar offerings from Verizon and AT&T, and were in-line with the company’s disruptive reputation.
They were valuable when T-Mobile was all about growth, helping it surge past Sprint and develop a loyal following.
For a long time, T-Mobile couldn’t change any plans thanks to an agreement it struck with regulators to get its acquisition of Sprint completed. But that promise to keep prices locked expired in April – the three-year anniversary of the Sprint deal closing – so the company could have made changes any time since.
While T-Mobile continues to enjoy strong growth now, the company is far more focused on profitability, which is why it felt inevitable that it would look to its legacy subscribers.
“As sad as it is for the customers, I do think it makes sense to move users off legacy plans to some that reflect more current usage models,” said Carolina Milanesi, an analyst at Creative Strategies. “The key is how you do that and I think the customer should be in the driver’s seat and be able to choose what fits them best.”
T-Mobile has traditionally been good about giving customers control and being clear about changes. And while the leak isn’t how the company would’ve wanted this program to be communicated, the older T-Mobile would’ve at least been more prepared.
Lack of Communication
T-Mobile said that the program was just a small test, so it didn’t need to make a grand announcement. But it’s unclear how this would’ve been communicated at all, or if they would just start pushing the notifications out. That alone seems problematic.
It’s a moot point, considering the information leaked on Reddit last week, and customers and the media circulating tips on what to do to opt out. The T-Mobile subreddit is dominated by a megathread about the automatic plan migration, with facts about which are affected.
- Simple Choice/Select Choice
- Simple Choice Business
- Magenta 55+
The migration means that everyone will, on average, pay $10 more a month. T-Mobile said that this affects a small group, but the company hasn’t said how many people will be affected. Not all legacy customers will get the notification.
But thanks to Reddit and the media coverage, customers are aware that they have the option to opt-out of the migration and stick with their original plan. Keep in mind that you’ll have to wait until you get notified before contacting customer service.
To be fair to T-Mobile, having an option to opt out is something that AT&T and Verizon didn’t offer when they increased their own prices.
“The reality is that current inflationary pressures are raising the cost of consumer goods and services and this is a reasonable bump in my humble opinion and subscribers can opt out,” said Will Townsend, an analyst at Moor Insights & Strategy.
Analysts noted that T-Mobile has worked to add more value to its newer plans, to make switching attractive to some users. The reality is also that these customers likely wouldn’t be able to get a better – or even similar – deal with another carrier.
But isn’t T-Mobile’s job to clearly explain these options to its customers?
Photo credit: T-Mobile