In September 2020, Verizon announced that it entered into an agreement with America Movil to acquire TracFone Wireless, Inc., the leading pre-paid and value mobile provider in the U.S., serving approximately 21 million subscribers through a network of over 90,000 retail locations nationwide at the time of the announcement. TracFone is a longtime partner of Verizon, and more than 13 million TracFone subscribers relied on Verizon’s wireless network at time of the announcement through an existing wholesale agreement.
The transaction between Verizon and TracFone is subject to receipt of regulatory approvals and other customary closing conditions. Verizon expects the transaction to close in the second half of 2021.
What will change for current TracFone customers?
Current TracFone customers will not have to make any immediate changes or take any action when the deal is finalized. Current customers will be able to remain on their current plans and will not have to change plans or devices when the transaction closes.
Will my TracFone service change? Verizon is excited to bring its world-class service to TracFone customers. In addition to Verizon’s leading network, current TracFone customers will gain access to Verizon’s innovation, technology and plan features, international calling options and increased options for devices.
Will I have to change devices? TracFone customers will be able to keep their current device after the close of the transaction. If a customer’s TracFone plan is served on a network other than Verizon’s, the customer will be offered the opportunity to upgrade their device in the future to ensure compatibility with Verizon’s network.
Will my bill go up? Verizon is committed to serving TracFone’s customers and to competing vigorously in the prepaid segment through plans that offer great value. Demonstrating that commitment, Verizon will not require TracFone customers to move to a more expensive plan when the transaction closes. And going forward, Verizon will provide a range of prepaid plans so customers can enjoy mobile access at price points that work for them.
What will Verizon acquiring TracFone mean for current Lifeline customers?
Verizon will welcome TracFone’s 1.7 million Lifeline customers to its network and, in doing so, will bring much needed facilities-based competition for Lifeline services. 90 percent of wireless Lifeline services currently ride on a single network, and the new facilities-based competition will compete for these customers.
Will Verizon continue to offer Lifeline service? Yes. Verizon sees the Lifeline program as a key element of TracFone’s service to value customers and a foundational element of Verizon’s commitment in this space. In keeping with that vision, following the close of the transaction, Verizon will maintain TracFone’s ETC status and continue to offer Lifeline service through TracFone. Verizon has made this commitment clear to regulators and will continue to do so as the transaction is finalized.
Will my Lifeline plan change? All current TracFone Lifeline customers will be able to keep their same plans when the transaction closed.
Will Lifeline customers benefit from the Verizon and TracFone transaction? Yes. Just as other current TracFone customers will gain access to a wide array of benefits by joining Verizon, Lifeline customers will benefit from the well-recognized quality of Verizon’s network. Lifeline customers will also benefit from competition for their business, as the transaction will bring a second wireless network into the segment.
How will the Verizon and TracFone transaction impact TracFone employees?
Verizon looks forward to bringing on TracFone’s team of experienced employees to better serve current TracFone customers and attract new prepaid customers.
Does Verizon plan to retain TracFone employees? Verizon will not only welcome TracFone employees to the Verizon team, but is actively seeking to retain them. Verizon is not planning any workforce reductions related to the transaction. In fact, Verizon contemplates incurring higher labor costs resulting from the acquisition, which demonstrates Verizon’s commitment to investing in TracFone’s business and the value that Verizon places on the knowledge and experience it stands to gain from the TracFone team.
Will TracFone employees’ pay or benefits change? TracFone employees will become Verizon employees and benefit from Verizon’s highly rated employment packages. Verizon has been recognized as one of the top-rated workplaces for compensation and benefits, and TracFone’s employees will enjoy Verizon’s generous employee benefits package.
How will this affect Verizon’s MVNO and wholesale business?
While TracFone will no longer be an MVNO wholesale customer of Verizon’s, Verizon will continue to sell wholesale service to other reseller MVNOs after the transaction is complete.
Will this transaction change Verizon’s wholesale business segment? Verizon is actively seeking to grow and expand its wholesale business and looks forward to making arrangements with new and diverse partners in order to put more customers on Verizon’s world class network and better target diverse customer segments. The wholesale market will continue to be competitive, as Verizon continues to compete with other network providers, like T-Mobile, for wholesale business.