Carriers may benefit when customers buy fewer phones or keep their devices longer, because fewer upgrades can mean less pressure to subsidize handsets. But the available evidence does not show that budget-phone sales specifically fell—or that fewer budget-phone purchases automatically increase carrier profit. The effect depends on equipment costs, recurring service revenue, customer growth and retention, and earnings.
How fewer upgrades can affect carrier costs
Carriers earn recurring revenue from wireless service and also sell or finance devices. Promotions and subsidies can make phones cheaper for customers, but they add to equipment-related costs. If customers upgrade less often, carriers may face fewer occasions to offer those incentives. That can ease cost pressure, though it may also mean less device revenue.
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Verizon’s Q2 2026 results illustrate this mechanism: the company attributed lower equipment revenue primarily to significantly lower upgrade volumes as customers kept devices longer, along with its strategic decision to reduce device subsidies. The statement covers upgrade activity overall; it does not distinguish budget phones from premium models. Verizon Q2 2026 results
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Why lower phone sales do not automatically mean higher profit
Equipment revenue is only one part of a carrier’s financial picture. To judge whether fewer upgrades helped, consider device revenue and subsidy spending alongside service revenue, customer additions, retention or churn, and operating earnings. A decline in equipment revenue alone cannot establish that overall profitability improved.
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- Carrier: This phone is locked to Tracfone, which means this device can only be used on the Tracfone wireless network. Tracfone plan required, activating is easy, just 3 steps.
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In the same Q2 2026 release, Verizon reported 7.2% year-over-year growth in consolidated adjusted EBITDA. That figure is a company-wide earnings measure for the period; it does not prove that lower upgrades or budget-phone sales caused the growth. Verizon also reported 184,000 postpaid phone net additions, a measure of subscriber growth rather than handset sales by price tier. Verizon Q2 2026 results
Service revenue and subscriber growth are separate drivers
Recurring service revenue can move for reasons other than how many phones customers buy, including customer counts and plan mix. T-Mobile reported 3.3 million postpaid phone net additions and $57.9 billion in postpaid service revenue for 2025, as well as $33.9 billion in Core Adjusted EBITDA. These company-reported figures describe additions, service revenue, and earnings; they do not show that budget-phone sales or handset mix caused the results. T-Mobile 2025 results
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- Please note, this device does not support E-SIM; This 4G model is compatible with all GSM networks worldwide outside of the U.S. In the US, ONLY compatible with T-Mobile and their MVNO's (Metro and Standup). It will NOT work with Verizon, Spectrum, AT&T, Total Wireless, other CDMA carriers, it is also not compatible with their MVNO (Visible, Xfinity Mobile, US Mobile, Cricket Wireless, etc).
- Compatibility with certain third-party devices and accessibility accessories, including some hearing aids, may vary depending on manufacturer support, Bluetooth protocols, software compatibility, and regional firmware limitations. For additional hearing aid compatibility information, please refer to Samsung’s official support documentation.
- 4G LTE Bands: B1/B3/B5/B7/B8/B20/B28/B38/B40/B41
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- Camera: 50 MP, f/1.8, (wide), 1/2.76", 0.64µm, AF | 50 MP, f/1.8, (wide), 1/2.76", 0.64µm, AF | 2 MP, f/2.4, (macro)
What industry forecasts do—and do not—show
S&P Global Ratings’ 2026 telecom credit outlook estimated around 8.6 million U.S. postpaid phone net additions in 2025, about 5% below 2024. It also said rate increases and premium-plan adoption supported service growth at AT&T and Verizon. These are outlook estimates and commentary about subscribers and service revenue—not measurements of budget-tier handset sales or proof of a profit effect from their decline. S&P Global Ratings’ 2026 telecom credit outlook
How to assess the claim
When evaluating whether a carrier benefited from customers buying fewer phones, compare the measures for the same carrier and reporting period, and check what each one actually covers:
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- Equipment revenue and subsidies: Did device revenue fall, and did the carrier also reduce subsidy spending?
- Service revenue and plan mix: Did recurring revenue rise or fall, and what role did rates or premium plans play?
- Additions and retention: Did the carrier gain customers, and what do its reported churn or retention measures indicate?
- Earnings or cash flow: Did operating results improve after accounting for both service and equipment economics?
- Handset price tier: Does the evidence identify budget devices specifically, or only upgrades and phone activity overall?
The available carrier evidence supports a possible link between fewer upgrades, lower subsidies, and equipment economics. It does not establish a specific decline in budget-phone sales or quantify how such a decline affects carrier margins.
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- Please note, this device does not support E-SIM; This 4G model is compatible with all GSM networks worldwide outside of the U.S. In the US, ONLY compatible with T-Mobile and their MVNO's (Metro and Standup). It will NOT work with other CDMA carriers, and it is also not compatible with their MVNO (Visible, Xfinity Mobile, US Mobile, Cricket Wireless, etc).
- Compatibility with certain third-party devices and accessibility accessories, including some hearing aids, may vary depending on manufacturer support, Bluetooth protocols, software compatibility, and regional firmware limitations. For additional hearing aid compatibility information, please refer to Samsung’s official support documentation.
- Camera: 50 MP, f/1.8, (wide), 1/2.76", 0.64µm, AF | 50 MP, f/1.8, (wide), 1/2.76", 0.64µm, AF | 2 MP, f/2.4, (macro). Battery: 5000 mAh, non-removable | A power adapter is NOT included.
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