T-Mobile (TMUS) CEO Mike Sievert said consumers will have to dial up a few more dollars for a new smartphone if President Trump’s tariffs fully kick in and raise costs for producers like Apple (AAPL).
“Tariffs are unpredictable at this point,” Sievert told Yahoo Finance Thursday evening (video above). “Obviously, we’re watching closely. If they come in and they’re significant in some way, that’s going to have to be borne by the customer. I mean, our model isn’t prepared for something like that.”
Sievert’s hot take echoes those from his CEO peers, Verizon’s (VZ) Hans Vestberg and AT&T’s (T) John Stankey, on their respective earnings calls this week.
Sievert added, “I think what would happen is prices will rise for smartphones,, and then people will slow down their purchases of smartphones, and upgrade rates will slow. Those would be the dynamics that would happen. We don’t see that that is on the way.”
Read more: What Trump’s tariffs mean for the economy and your wallet
T-Mobile stock fell 5.5% in premarket trading on Friday as the company only reiterated its full-year outlook for post-paid net customer additions. It also missed post-paid phone net addition estimates. The read-through for investors is that the company’s taking a cautious stance on the year amid rising economic uncertainty.
Sievert said he isn’t seeing much change in consumer behavior right now.
Still, the major phone carriers are doubling down on value messages to nervous consumers in what is shaping up to be a tariff-driven price war.
Following Trump’s “Liberation Day” earlier this month, Verizon announced it would give new and existing customers a free phone with a trade-in device. An added bonus: a three-year price lock guarantee on phone plans.
Listen: How Intel’s former CEO sees the tariff blowback
T-Mobile countered this week with a five-year price guarantee on phone plans.
“This year may not be so forgiving. The Big Three wireless operators face headwinds from much reduced net immigration (population growth) and from a much more aggressive Comcast,” said longtime phone industry analyst Craig Moffett of MoffettNathanson.
“In the face of that pressure, Verizon recently upped the ante for promotionality still further with a three-year price lock that now gives away free phones to, well, just about anyone. That should help grow net additions … for Verizon. But what of their competitors? If the pool isn’t deep enough, AT&T, or even T-Mobile, will have no choice but to respond. That’s what happens in zero-sum markets.”
