T-Mobile (TMUS) , one of the largest phone carriers in the U.S., is struggling to reverse a concerning pattern of customer behavior after issuing a series of price increases over the past few months.
During the second quarter of 2025, T-Mobile attracted 830,000 new postpaid phone customers. However, its postpaid phone churn (the number of customers who cut their phone service) increased by 10 basis points year-over-year.
💵💰Don't miss the move: Subscribe to TheStreet's free daily newsletter 💰💵
The increased customer loss comes after T-Mobile hiked the prices of its older phone plans (One, Magenta, Simple Choice, and Go5G 55) by $2 or $5 per line last year. Then, in April, it issued another price hike for select legacy plans, raising monthly prices by $5. It also increased its monthly Regulatory Programs & Telco Recovery fee.
Related: T-Mobile’s free perk for customers will soon disappear
Recently, T-Mobile has been launching new deals and perks to prevent more customers from switching to other providers. Last month, it launched three new low-priced prepaid plans and offered customers a free DoorDash subscription (DashPass) through the T-Life app.
During an earnings call on July 23, T-Mobile CEO Mike Sievert said that the company is operating in a “highly competitive environment” where competitors are unveiling “unprecedented device promotions.”
The company expected churn to be elevated this quarter due to recent price increases. Now, it anticipates churn decreasing year-over-year, remaining flat, or slightly increasing during the third quarter of this year.
T-Mobile hopes a new service will attract back customers
Amid this major shift in customer behavior, T-Mobile has launched a cheap new service to attract and retain customers.
In partnership with Starlink, T-Mobile is now offering a new direct-to-cell satellite messaging service called T-Satellite. Through over 650 Starlink satellites orbiting in space, the service provides extended coverage to more than “500,000 square miles of U.S. territory that traditional cell towers can’t reach, including Verizon and AT&T,” according to a recent press release.
Related: Verizon hopes a new tactic will fix fleeing customer problem
Non-T-Mobile customers can subscribe to the service for $10 a month for a “limited time” before it increases to $15 a month. For T-Mobile customers who have Experience or Go5G Next plans, the service is already included for free.
T-Satellite automatically allows customers to send and receive text messages and share their location in areas where cell towers fail to provide coverage. However, T-Mobile warns on its website that satellite messaging “may take longer, depending on availability and connection conditions.”
T-Mobile plans to add picture and voice messaging to T-Satellite, among other features, over the next few months. T-Satellite currently works with over 60 phones; customers can find the full list of compatible devices here.
T-Mobile bets on T-Satellite to appeal to a vital group of customers
During the July 23 earnings call, T-Mobile Business Group President Callie Field said that T-Satellite will especially benefit first responders.
“We're also seeing the opportunities in our beta to use T-Satellite with first responders,” said Field. “Also with state and local municipalities, you think of a bus driver that couldn't get in touch with parents when there was an emergency on the bus, and this really unlocks value for both the public sector as well as in enterprises where we start to see people use cases like oil and gas when they're out doing operations that require connectivity in places that are in that 500,000 square miles that are untouched by any carrier.”
More Telecom News:
- Verizon’s push to make switching harder for customers hits a snag
- T-Mobile announces generous offer for conflicted customers
- Amazon pulls the plug on a free service for customers
T-Satellite was also used during the deadly Texas floods, which took place a few weeks ago. T-Mobile was able to transmit emergency messaging to customers through this service, which was in beta testing.
“Over a quarter of a million text messages went out over satellite during the most critical moments of this emergency,” said Sievert during the call. “And people were able to be connected when it mattered.”
The official launch of T-Satellite comes after Verizon introduced its free satellite messaging service in March; however, it is only compatible with select Android phones, such as the Samsung Galaxy S25 or the Google Pixel 9.
AT&T is also working with AST SpaceMobile on a satellite service that offers “broadband connectivity: voice, data, and text in remote, off-grid locations,” according to AT&T’s website.
Related: Amazon quietly plans to offer customers a convenient new service
