- Net additions remain an important metric to gauge the health of the wireless sector
- With fewer immigrants in the U.S., it stands to reason there will be fewer net adds
- Of the Big 3 wireless carriers, T-Mobile appears the most at risk
Investment analysts expect President Donald Trump’s changes in U.S. immigration policy will have a profound effect on wireless carriers’ subscriber counts in 2025 and beyond, but the carriers themselves are reluctant to own up to any near-term impact.
That’s in part because it’s a sensitive political subject – and it’s too early to tell. But there’s no denying that a crackdown in U.S. immigration will lead to a lower U.S. population, resulting in a smaller pool of customers for the wireless industry that already serves nearly everybody old enough to hold a cell phone.
The biggest impact from the immigration crackdown is expected at T-Mobile because it has the highest share of prepaid customers. Prepaid service is typically more affordable to immigrants and lower income customers than postpaid, which usually requires a credit check.
To be sure, all three carriers are coming off a heady fourth quarter, historically the busiest time for wireless carriers. T-Mobile reported Q4 postpaid phone net adds of 903,000 and “continues to run circles around its competitors,” noted MoffettNathanson analyst Craig Moffett.
The other two did pretty well themselves, though. AT&T counted 482,000 postpaid phone net adds in Q4, while Verizon gained 568,000 postpaid phone subs in the same period.
But again, prepaid is where it counts the most when it comes to immigration.
“In terms of prepaid exposure, T-Mobile is most exposed, as it had the most prepaid customers as of the end of 2024,” said Wave7 Research principal Jeff Moore.
T-Mobile ended 2024 with 25.2 million prepaid subscribers, compared to 20.2 million prepaid subscribers for Verizon and 17.4 million prepaid subscribers for AT&T, he told Fierce.
In a report today, Moffett reminded investors that there are “considerable risks" to growth for the whole industry from tighter borders and potential deportations. While difficult to gauge at this stage, he has estimated a reduction of about 1.2 million net adds in 2025, down from the industry’s 6.8 million net adds in 2024.
“T-Mobile is obviously well aware of these headwinds … and it’s apparently unconcerned,” he said.
What carriers are saying
Indeed, on Wednesday’s Q4 earnings call, T-Mobile Consumer Group President Jon Freier said T-Mobile’s prepaid business is “doing very well” and “it’s really early for us to really say in terms of what’s happening around immigration."
However, “when you look at the peak immigration flows into the country, whether legal immigration [or] illegal, the overall peak in 2022 … we don’t really see an outsized impact in terms of inflow into our prepaid business,” he said.
“Our business is primarily revolving around the very highest premium monthly prepaid subscriptions and not necessarily the transactional prepaid business. We have some of that, but most of that is concentrated within other companies,” Freier added.
Relative to T-Mobile’s base, “we feel that’s very, very stable,” he said.
“Whatever might be playing out, we think we’re very insulated from that perspective around our prepaid business and the overall broader business as a whole,” Freier said.
Meanwhile, Verizon executives largely dismissed the risk of a subscriber slowdown when asked about the impact of immigration during their Q4 earnings call. It’s worth noting that Verizon’s prepaid division is just now showing signs of turning around after many quarters of losses since the company acquired TracFone in 2021.
Verizon refers to prepaid as its “value” unit. “There has been lower immigration in the last few quarters, yet we are seeing really strong performance in our value business,” Verizon Consumer Group CEO Sowmyanarayan Sampath told investors.
During AT&T’s Q4 earnings call, CEO John Stankey said relative to the industry, AT&T is “a bit less sensitive” to changes in immigration because it doesn’t play as effectively as he’d like it to be in this segment of the market.
“I guess the good news is, if there is a downward trend on it, we'll be less impacted," he said. "It doesn't mean that I wouldn't like to be more effective in that space. But we just aren't quite as well distributed in that segment of the market as maybe some other folks are."
In aggregate, having more people living in the United States is good for a business like AT&T.
“I’m hopeful that as policy-makers kind of go through the next number of months and they think about what they want to do, they get to an appropriate place that understands that for the U.S. economy to continue to grow, we need smart immigration,” Stankey concluded. “We need to do this the right way, and that is in everybody’s interest to do that. And hopefully, the wise minds prevail, and that’s what takes place, and we’ll see what happens.”