T-Mobile Axes $40 and $50 Plans After 15% Churn Spike
T-Mobile has discontinued two budget phone plans introduced in December after seeing a 15% rise in churn among those subscribers. The carrier will migrate 250,000 affected users to its Magenta plan and issue a $50 bill credit by the end of Q2.
1. Discontinuation of Budget Plans
T-Mobile launched two economy phone plans in December priced at $40 and $50 per month, each offering limited high-speed data and deprioritized streaming. Following a 15% increase in subscriber turnover on those plans during the first quarter, the company decided to discontinue both offerings.
2. Subscriber Migration and Credits
Approximately 250,000 customers currently on the discontinued plans will be automatically moved to the standard Magenta plan by the end of Q2. To ease the transition, each affected account will receive a one-time $50 bill credit, applied on the next billing cycle.
3. Expected Impact on Churn and Revenue
By eliminating lower-tier offerings that underperformed on retention, T-Mobile aims to reduce overall churn by up to 0.1 percentage point in the next quarter. The shift to higher-priced Magenta subscriptions is projected to lift average revenue per user by roughly $3–$5 monthly once migration completes.