When discussing T-Mobile’s first quarter results, CEO Mike Sievert answered the question that’s on everyone’s mind: how are tariffs going to impact pricing? And the answer is not pretty.
Tariffs that have been imposed or might be imposed in the future could increase the cost of doing business for telecom companies. And while they may counter the immediate effects of tariffs on their wireless capital expenses by hoarding equipment or slowing the pace of network deployment, they only have two options when it comes to smartphone levies: either eat up the cost or pass it on to customers. AT&T and Verizon CEOs have already said that customers would have to bear the cost of tariffs. And now, T-Mobile execs have revealed similar intentions.
Carriers like T-Mobile sell smartphones at subsidized rates. This allows customers to save significantly on new handsets. T-Mobile‘s CEO Sievert says that if prices do end up rising because of tariffs, the burden will be on customers. The company’s business model doesn’t have an allowance to absorb tariff-related costs. T-Mobile is also in no position to shoulder the cost, implied the CEO, despite all the talk about its financial well-being. Sievert doesn’t seem to think that tariff-fueled price increases will be taken as well by customers as legacy plan price hikes were, and expects upgrade rates to slow down.
You know, 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. So, you know, it’s gonna the customer’s gonna wind up bearing the cost of that, and probably the dynamic of that would be a slowdown in upgrade rates.
—Mike Sievert, T-Mobile CEO, April 2025
Sievert doesn’t expect any material impact on the company’s business at the moment.
While it’s true that a company’s hands are tied when it comes to tariffs, customers of the three largest companies already seem to be at their breaking point. This became all the more evident when Charter emerged as the most successful company in Q1 in terms of line additions.
So while T-Mobileand AT&T and Verizon for that matter, might think it would be better to not lean on other areas of their business to shield customers from the effects of tariffs, this might prove to be the last straw for some customers.
