Verizon completes its acquisition of TracFone Wireless
Back in September of 2020 Verizon announced it was planning to acquire TracFone Wireless. TracFone is one of the leading prepaid phone providers in the US and its acquisition was expected to help Verizon expand its portfolio into the value segment. For the unaware, TracFone has been a longtime partner of Verizon, with more than 13 million TracFone subscribers relying on Verizon’s wireless network through an existing wholesale agreement. Should the acquisition have been approved, Verizon aimed to bring its 4G LTE and 5G networks to TracFone customers, develop its distribution channels, and expand its market opportunities. That deal has finally been approved by the FCC.
On Wednesday, Verizon announced it had completed the acquisition, following the FCC’s approval. TracFone wireless started life as a prepaid mobile company called Topp Telecom back in 1996. The company was then renamed TracFone in 2020.
The acquisition deal set Verizon back a whopping $6+ billion in cash and stock. It was originally planned for 2020 but was stuck waiting for regulatory approval. TracFone also owns and operates several subsidiary MVNO carriers, such as Straight Talk, Simple Mobile, Total Wireless, Walmart Family Mobile, Net10, and Page Plus. As a result, these are all now properties of Verizon. Together, they have an estimated 20 million subscribers in the US and are available at over 90,000 retail locations.
The company offers service on all three major carriers. Verizon will continue to offer those services as they exist on those networks for now. Verizon says that over 13 million existing TracFone customers are already using the Verizon network. The remaining users will likely be migrated to the Verizon network over time.
Verizon Consumer Group CEO Ronan Dunne said the following of the acquisition:
“The addition of the TracFone brands firmly establishes Verizon as the provider of choice in the value segment, which complements our clear leadership in the premium segment.”
The prepaid carrier is one of the largest providers of the government-funded Lifeline program. The program offers discounted and free services to low-income households. The FCC had voiced concerns initially that Verizon could end or reduce services to those customers, however, Verizon has promised to maintain those services for at least 7 years. Verizon has also committed to providing “cost-effective” 5G devices to Lifeline customers as part of the acquisition.
California regulators also approved the deal on November 18th but had much stronger restrictions. California will require Verizon to offer Lifeline services for 20 years. It also required Verizon to agree to give free 5G-compatible devices to customers and to agree not to increase existing prices for at least 5 years.