,
T-Mobile, and
Verizon are equipped to brave what lies ahead, per financial analysts.
The three wireless companies will be competing with each other and other rivals
for a shrinking customer base this year. Add this to
the tariff scare, and it's natural to wonder whether the Big Three's financials will take a hit.
Most analysts don't think there's anything to worry about.
Though these are uncertain times, wireless companies are unlikely to take as big of a hit, if any, as other companies not only because their exposure to tariffs is limited, but also because carrier services are considered essential, meaning customers keep paying for phone services even when times are tough.
Also, while smartphone manufacturers could expect to be directly affected, the effects are much less direct for telecommunication companies.
While AT&T, T-Mobile, and Verizonmay see their wireless capital expenses (capex) rise by around 7 percent due to tariffs, they can reduce the immediate effects by stockpiling equipment or slowing the pace of 5G network deployment. While this may affect network quality, such a move will shelter wireless companies and their customers from the effect of tariffs in the short term at least.
People don't terminate phone service even in uncertain times, so wireless companies can rest easy for now
Wireless companies don't exist in a vacuum though and it can't be business as usual amid a gloomy economic backdrop. For instance, businesses may scale back their activities and reduce hiring, and this could mean reduced demand from enterprises. Similarly, if tariffs cause smartphone prices to increase, consumers may retain their existing devices for longer. Mobile network operators may also have to make changes to their current subsidy model, which allows customers to buy phones at reduced prices through carriers.
Heightened uncertainty could cause businesses to pause investment, hiring, or projects that could impact sales to the telcos. The potential for higher handset costs from tariffs, if they are implemented and sustained, could cause subscribers to hold on to devices longer, which would help margins and free cash flow. However, the industry is built on a device subsidy model that would be challenging if tariffs materially raise the cost of handsets.
—BofA Global Researchfinancial analysts, April 2025
In short, while carriers may not feel the sting of tariffs directly, the overall uncertainty will spill over to them sooner or later.
We can expect to have more clarity on this soon as AT&T, T-Mobile, and Verizon will announce their first quarter results today and address concerns like these.
It doesn't help that the screeching growth rate in the industry is coming to a halt. The industry will grow by 1.38 million postpaid phone customer additions during the first quarter, down 12 percent year-over-year, per TD Cowen analysts. This was echoed by Evercore analysts, who expect 1.36 million postpaid phone customer additions and a year-over-year decline customer decline of 165,000.
To fight the slowdown, Verizon is
already threatening to start a price war, which is something customers will appreciate after
a string of price increases. However, this will cut into the bottom line of wireless companies, intensifying the pressure on them.
Promotions tend to pulse in and out of the market though broadly speaking 1Q seemed to be particularly competitive, and the ongoing macro uncertainty combined with a shrinking subscriber pool will likely put more pressure on the system.
—Evercore analysts, April 2025
On top of that, the US is less welcoming to immigrants these days, which might slow down subscriber growth. Meanwhile,
non-traditional competitors are
trying to woo customers with their wireless offerings.
Taking all of this into consideration, AT&T is expected to gain 254,000 postpaid phone customers in Q1 2025 and T-Mobile is likely to add 500,000 new postpaid phone customers.
Verizon is forecasted to bleed 308,000 postpaid customers, but the company will remain financially strong. Verizon's wireless business continues to grow and its
acquisition of fiber company Frontier Communications will further strengthen its position.
Anam Hamid is a computer scientist turned tech journalist who has a keen interest in the tech world, with a particular focus on smartphones and tablets. She has previously written for Android Headlines and has also been a ghostwriter for several tech and car publications. Anam is not a tech hoarder and believes in using her gadgets for as long as possible. She is concerned about smartphone addiction and its impact on future generations, but she also appreciates the convenience that phones have brought into our lives. Anam is excited about technological advancements like folding screens and under-display sensors, and she often wonders about the future of technology. She values the overall experience of a device more than its individual specs and admires companies that deliver durable, high-quality products. In her free time, Anam enjoys reading, scrolling through Reddit and Instagram, and occasionally refreshing her programming skills through tutorials.
Read the latest from Anam Hamid
- T-Mobile deploys highly-anticipated upgrade to 5G for customers across the US
- T-Mobile is celebrating phenomenal Q1 with surprise Starlink announcement
