T-Mobile Backs Off Price Hike They Pretended Wasn’t A Price Hike
Earlier this month we noted how everything critics of the T-Mobile and Sprint merger predicted has come true, whether it’s 10,000 employees who have lost their jobs, the steady implementation of fees and price hikes, a lower overall quality product, or the company’s boring new branding.
Those inevitable outcomes recently culminated in a new suite of price hikes the company pretended weren’t actually price hikes. In short, the company declared it would be automatically “upgrading” many of its users to more expensive tiers, violating its pre-Sprint merger promise not to raise rates.
Initially, T-Mobile denied this was a price hike (it was a price hike). Then the company tried to claim it wasn’t impacting many customers (it impacted a lot of customers). Now the company appears to have backed off the decision after getting significant backlash, but not after first blaming leakers, the press, and a supposed “lack of context.” From the company’s recent conference call:
“Now I don’t know that we still have to do that test cell because, to your point, we did get plenty of feedback thanks to the erroneous context of the leak. And I think we’ve learned that particular test cell isn’t something that our customers are going to love.”
This is precisely the kind of weasel-esque corporate speak that former, pre-merger T-Mobile CEO John Legere would have relentlessly made fun of. But now that there’s overall less serious competition in the U.S. wireless market, that kind of disruptive behavior is simply no longer necessary.
Based on comments by T-Mobile President of Marketing Mike Katz, the company didn’t honestly learn all that much and plans similar “tests” in the future:
“I would expect to see more of those kinds of tests from us because it’s been a consistent practice throughout the entire Un-carrier journey so that we get it right for the experience for our customers.”
In short they’re still trying to pretend a price hike was somehow innovative.
This is precisely why meaningful regulatory review of competition-eroding mergers matter (the Trump FCC didn’t even bother reading details about the plan’s impact before approving it). Once such deals are done, the griping of the press and public generally isn’t enough to counter the reduced competition, or the relentless need of publicly traded companies to exploit it in order to please Wall Street longer term.