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Phone carriers may benefit when customers buy fewer phones or upgrade less often, because they can spend less on device subsidies and promotions. But that possibility is not proof that falling budget-phone sales increase carrier profits: the available carrier data describes upgrade volumes overall, not budget devices specifically. To judge the effect, look at equipment costs alongside recurring service revenue, customer additions, retention and earnings.

How fewer upgrades can help a carrier

Carriers earn recurring revenue from wireless service, but they also sell or finance phones and may discount devices to attract or retain customers. When customers keep their phones longer, fewer may upgrade through the carrier. That can reduce equipment-related costs and pressure to subsidize devices, even as equipment revenue falls.

Verizon’s Q2 2026 results give a concrete example of this mechanism: the company attributed lower equipment revenue primarily to significantly lower upgrade volumes as customers kept devices longer, together with its strategic decision to reduce device subsidies. This statement concerns upgrades overall; it does not identify budget phones as the cause or separate sales by phone price tier. Verizon Q2 2026 results

The distinction matters. Lower equipment revenue is not automatically higher profit. A carrier could spend less on subsidies but also lose device sales, subscribers or service revenue. The overall outcome depends on how these changes balance against one another.

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What the reported figures show—and what they do not

Measure Reported result What it can tell you
Verizon postpaid phone net additions 184,000 in Q2 2026 Customer additions in that period; not a measure of budget-phone sales.
Verizon consolidated adjusted EBITDA growth 7.2% year over year in Q2 2026 Earnings growth occurred alongside Verizon’s explanation of lower equipment revenue; it does not establish that fewer upgrades caused the growth.
T-Mobile postpaid phone net additions 3.3 million in 2025 Customer additions for the year; not handset-tier sales.
T-Mobile postpaid service revenue $57.9 billion in 2025 Recurring-service performance, distinct from device revenue.
T-Mobile Core Adjusted EBITDA $33.9 billion in 2025 An earnings measure to consider alongside customer and service results; it does not show that budget-phone sales drove performance.
U.S. postpaid phone net additions Around 8.6 million in 2025, about 5% below 2024 S&P Global Ratings’ 2026 outlook estimate, not a reported handset-sales statistic or a budget-phone sales count.

T-Mobile’s 2025 results illustrate why customer growth, service revenue and earnings should be considered separately. The company reported substantial postpaid phone additions and postpaid service revenue as well as Core Adjusted EBITDA, but those figures do not connect its financial results to handset mix or a decline in budget-phone sales. T-Mobile 2025 results

How to assess whether a carrier actually benefits

For a useful comparison, check the same reporting period and geography, and consider these measures together:

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  • Equipment revenue and subsidy spending: Look for whether device revenue changed and whether the carrier says it spent less on discounts or promotions.
  • Service revenue and plan mix: Recurring service revenue may rise or fall independently of device sales. S&P Global Ratings’ 2026 outlook estimated around 8.6 million U.S. postpaid phone net additions in 2025, about 5% below 2024, and said rate increases and premium-plan adoption supported service growth at AT&T and Verizon. That is an industry outlook estimate, not evidence of a budget-phone sales decline. S&P Global Ratings’ 2026 telecom credit outlook
  • Phone additions and retention: Net additions indicate whether a carrier is adding customers, while churn or retention data helps show whether it is keeping them. Neither reveals which phone price tiers those customers chose.
  • Operating earnings: Check whether the carrier’s earnings improved or weakened alongside device and service results. A change in one category alone cannot establish the effect on overall profitability.
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Why the budget-phone claim needs a qualification

The available carrier statement links lower upgrade volumes overall and reduced subsidies to lower equipment revenue, but it does not report a fall in budget-phone sales. The reported customer-addition, service-revenue and earnings figures likewise do not quantify sales by handset price tier or show how such sales affect carrier margins. So the defensible conclusion is conditional: fewer upgrades may ease device-related costs, but the evidence does not establish that falling budget-phone sales specifically benefit carriers or raise their total profits.

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