New hierarchy emerges for AT&T, T-Mobile, and Verizon

T-Mobile has been boldly distancing itself from its Un-carrier roots, a shift consistent with its massive subscriber growth. For years, the company invested heavily in its 5G network while maintaining a pricing edge over its chief rivals, AT&T and Verizon. The efforts are paying off as consumers take notice.

Perception is improving

According to data from investment-banking firm TD Cowen, shared by Ookla's Lead Industry Analyst Mike Dano, T-Mobile now leads the industry in brand and image.

TD Cowen has been surveying customers on carrier perception for 13 years, asking them to rank the providers on brand/image, with 1 denoting the best and 3 representing the worst.

T-Mobile has overtaken Verizon with an average rank of 1.96, compared to Verizon's rating of 2.01 and AT&T's 2.03.

A long time coming

T-Mobile's dethroning of Verizon is consistent with TD Cowen's predictions and echoes other reports of shifting consumer sentiment.

By many metrics, T-Mobile has the best network across the US. And while it may have raised rates, it continues to offer better pricing than its rivals for the most part. It took a while for customers to catch up to the new reality, but public opinion has started shifting.

Verizon is hard at work to regain its lost glory, improving its network with the C-Band rural deployment and rolling out aggressive promotions to regain consumer favor.

T-Mobile has been chipping away at Verizon's lead for more than six years, and now has the upper hand.

Meanwhile, AT&T has also been closing the gap with Verizon and is now very close to overtaking it for second place.

Interestingly, TD Cowen found little interest in convergence bundles, which package cellular and internet services together at a lower price.

This survey was conducted on December 31 with 1,033 participants.

The report comes at an important time for T-Mobile

While the survey numbers look positive, the timing is critical as T-Mobile enters a transitional phase. With aggressive growth at the cost of revenue no longer a priority and device financing squeezing its margins, the company has cut back on the promotions that customers cherished.

Meanwhile, the company will no longer report subscriber gains in Q1, raising speculation that it expects elevated churn moving forward.

TD Cowen's analysis suggests those concerns may be overblown. T-Mobile is no longer a challenger brand. It's now rated higher than AT&T and Verizon by consumers, and the premium image means higher prices and fewer promotions may appear justified.

Déjà vu

Customer sentiment toward T-Mobile improved because of its better pricing and network. However, with AT&T and Verizon narrowing the gap, the network advantage has eroded. Meanwhile, AT&T and Verizon are providing more value through new bundles and deals, making themselves better alternatives to T-Mobile as vocal online communities become disillusioned with the company.

By going back on the very principles that improved customer opinions, T-Mobile risks repeating Verizon's mistake.