Verizon has acquired Tracfone, a pre-paid and value mobile provider, which expands its portfolio into the value segment, bringing enhanced access to its industry-leading wireless network and comprehensive suite of mobility products and services to a new customer base.
Tracfone is the largest reseller of wireless services in the United States, serving 21 million subscribers through a network of over 90,000 retail locations nationwide. A longtime partner of Verizon, more than 13 million Tracfone subscribers currently rely on Verizon’s wireless network through an existing wholesale agreement.
Following the acquisition, Verizon expects to bring its award-winning 4G LTE and 5G networks and other innovative technologies to Tracfone customers, further develop Tracfone’s distribution channels, and expand Tracfone’s market opportunities.
The acquisition of Tracfone aligns with Verizon’s growth oriented Network as a Service strategy, and will provide more U.S. consumers seeking value wireless plans with improved experiences and enhanced services, including fixed wireless residential broadband solutions, 5G access and expanded international calling and roaming options. The portfolio of Tracfone brands creates a platform for growth and innovation in Verizon’s support of the value and low income segments. Verizon will continue to offer Lifeline service through Tracfone and further develop its core brands, products and distribution channels, including StraightTalk, the vast majority of whose customers operate on the Verizon network today.
About the transaction, Tammy Parker, senior analyst at GlobalData, wrote, “Verizon has long needed a secondary brand and value proposition that it can use to serve the prepaid wireless market without cannibalizing its premium flagship brand. AT&T has Cricket Wireless and T-Mobile has Metro by T-Mobile. Verizon will gain a substantial base of prepaid subscribers acquired from Tracfone, making it the largest US prepaid service provider.
“Given that more than 13 million of Tracfone’s 21 million subscribers are already on Verizon’s network, there will be an easy transition for most of Tracfone’s customers. In addition, Verizon is making a competitive dent in the MVNO businesses of its rivals as it will be taking control of around 7 million MVNO customers that are currently on their networks,” she added.