Verizon: TracFone Deal for $6.9 Billion

Verizon Wireless has announced its intentions to enter the “value” market with the $6.9 billion purchase of US low-cost carrier TracFone from America Movil.

TracFone is a wireless company that provides Mobile Virtual Network Operator (MVNO) services under numerous brand names, including Simple Mobile, Page Plus Mobile, and Total Wireless, using wholesale deals with major US carriers.

Verizon can use TracFone’s 21 million subscribers and 90,000 retail locations as a platform to develop, while the fact that Verizon’s network currently supports services for 13 million Total Wireless customers makes these synergies quite apparent.

TracFone from Verizon

Verizon also believes that using its network developments to enhance the value of subscriptions is a good strategy for expanding the business. Fixed Wireless Access (FWA) broadband services, 5G, and international calling and roaming packages will be available on low-cost pricing plans, according to the company.

“We are excited about the opportunity to bring Tracfone and its brands into the Verizon family where we can put the full support of Verizon behind this business and provide exciting and compelling products into this attractive segment of the market,” said Hans Verstberg, Verizon CEO.

However, the US Federal Communications Commission (FCC) has certain stipulations regarding low-income consumers and TracFone’s commitment to a poverty alleviation program for low-income families. Both objectives will be kept track of.

“This transaction firmly establishes Verizon, through the Tracfone brands, as the provider of choice in the value segment, which complements our clear leadership in the premium segment,” added Ronan Dunne, CEO of the Verizon Consumer Group.

“We’re looking forward to welcoming all of Tracfone’s customers and each of Tracfone’s nearly 850 valuable employees. We are excited to expand our relationship with Tracfone’s distribution partners, and when Tracfone’s customers become part of our family, they will get the best of both worlds – more choices, better services, and new features thanks to Verizon’s investment–but with the flexibility and control that they have come to value with its prepaid plans. Being connected is now more important than ever, and Tracfone customers will benefit from Verizon’s innovations–both now and in the future.”