T-Mobile's shares declined on Wednesday by $6.03 or 2.99% to close at $195.32. That made today's close for the stock its first under $200 since June 10, 2024 and also set a new 52-week low for the shares at $194.89. The downtrend for the stock started in early October when it was trading at $238. Since markets look ahead, this change in trend could indicate that something bearish is going to happen to T-Mobile as soon as April. That is six months after the trend changed.
Could we see a customer revolt at T-Mobile starting in April?
The first thing that comes to my mind is that by April, there will be a customer revolt thanks to T-Mobile's plan to start forcing customers to use the buggy and controversial T-Life app to handle 100% of phone upgrades, line additions, and account set-ups, including home internet. My crystal ball sees reps quitting, stores closing, and the stock declining even more. And the silly part is that T-Mobile continues to blow away the competition quarter after quarter. So why is T-Mobile transitioning to a digital carrier?
Is T-Mobile's declining stock giving us a warning?
Yes. Forewarned is forearmed.
0%
No. It's just a sell-off.
66.67%
I'll tell you in May.
33.33%
The shift is being done as T-Mobile focuses on squeezing the maximum profits out of existing customers. Closing stores will eliminate many costs that T-Mobile pays such as rent and maintenance. Will T-Mobile customers be okay with having to do without nearby retail stores? Forcing T-Life to handle 100% of most transactions means the carrier pays fewer sales commissions, lower costs for in-store staff and customer service agents. It also could mean that contacting customer service becomes even harder to do and that the odds of having a good experience decline (there is always T-Force which has a great track record handling complex and lost-cause issues).
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Lastly, by moving all transactions to T-Life, T-Mobile can get rid of "legacy systems" including those it picked up from Sprint in the $26.5 billion acquisition. This will lower costs since it will reduce the complexity of the IT systems used by T-Mobile. With T-Mobile adding many more customers with Fixed Wireless Access (FWA), using the T-Life app will help T-Mobile scale easier since there will be no need to build more stores or add more customer service reps.
The transition means T-Mobile doesn't care if it loses older customers
T-Mobile customers should be able to get more things done quickly using the T-Life app. There will be no more long wait times at stores, and even better no headache-inducing music playing while on hold. There are negatives here. For some older customers, using the T-Life app is too complicated and T-Mobile faces the loss of these customers.
This stock chart has turned ugly in a hurry. | Image credit-Google
The digital platform T-Mobile wants all of its customers to employ could help solve complicated issues using AI and the customer's personal data. With AI, solutions to a problem, or recommendations can be sent to a customer before T-Mobile is even contacted. Since T-Mobile's top ranked T-Mobile Tuesdays reward program is now part of the T-Life app, T-Mobile customers should become accustomed to the app making it easier for many to transition.
T-Mobile believes it can turn its strong customer growth rate into higher profits and ultimately a higher stock price. But the stock is giving us a warning that the transition might not go as smoothly as T-Mobile hopes it will.
Alan, an ardent smartphone enthusiast and a veteran writer at PhoneArena since 2009, has witnessed and chronicled the transformative years of mobile technology. Owning iconic phones from the original iPhone to the iPhone 15 Pro Max, he has seen smartphones evolve into a global phenomenon. Beyond smartphones, Alan has covered the emergence of tablets, smartwatches, and smart speakers.
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