by Tali Arbel
(AP) — Verizon, the country’s largest phone company, is buying prepaid phone seller Tracfone for up to $6.9 billion, expanding its low-income customer business.
Tracfone, a subsidiary of Mexico telecom giant America Movil, is a mobile reseller, the largest in the U.S. It doesn’t build its own network, instead paying companies like Verizon, AT&T and T-Mobile a fee to use theirs. Nearly two-thirds of Tracfone’s 21 million U.S. customers get their service from Verizon via Tracfone renting Verizon’s network.
Most U.S. cellphone customers are “postpaid” rather than prepaid — they pay a monthly phone bill. Prepaid customers are more likely to be low-income or have bad credit. Tracfone is a major provider of the U.S. Lifeline service, which discounts phone and internet service for low-income customers. Verizon said Monday that it would continue to offer Lifeline through Tracfone.
The deal consists of $3.1 billion in cash, $3.1 billion in stock and up to $650 million more in cash for America Movil based on the Tracfone business hitting certain performance targets after the sale.
Verizon said it expects the deal to close in the second half of 2021. Regulators must approve it.
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Tali Arbel is a reporter for The Associated Press. Associated Press Writer Mark Stevenson contributed from Mexico City.
Photo “Verizon” by Mike Mozart CC2.0
” Prepaid customers are more likely to be low-income or have bad credit. ”
My credit is superb, most definitely not considered low income, and I use Tracfone/StraightTalk because it is a smarter way to spend money. I get the use of Verizon towers at nearly half the cost. My coverage is also great and I got 25 GB of LTE data. So many sheeple are overpaying for cell phone service from the big three carriers, Verizon, AT&T, Tmobile.
I hope this deal is blocked. Less competition means less choice for us consumers.