What you need to know
- Verizon Wireless has reached a deal to purchase wireless re-seller Tracfone.
- It includes $3.125 billion in cash, $3.125 billion in Verizon stock, and up to another $650 in cash.
- Tracfone is the largest pre-paid wireless brand, touting 21 million subscribers.
Another big shift is taking place in the wireless space, with Verizon making the formal announcement on September 13 that it's now entered an agreement to purchase Tracfone (opens in new tab).
There's a good chance you've heard of Tracfone before, and you might even use the company's services yourself. It's the largest wireless re-seller in the United States, offering affordable wireless plans through the main Tracfone brand and smaller sister brands — including Straight Talk, Simple Mobile, Total Wireless, Walmart FamilyMobile, and others.
Verizon is buying Tracfone for around $7 billion, with that being broken up into three main parts:
- $3.125 billion in cash.
- $3.125 billion in Verizon common stock.
- $650 million in "future cash consideration related to the achievement of certain performance measures and other commercial arrangements."
Commenting on the news, Verizon Chairman and CEO Hans Vestberg said:
Of the 21 million Tracfone customers, more than 13 million of them already have their service powered by Verizon's network. It's said that all Tracfone customers will have access to Verizon service "soon," though it remains unclear if Tracfone's other service options from AT&T and T-Mobile will continue to be available. Verizon will also expand its, 4G LTE and 5G services, in addition to "other innovative technologies."
The deal is expected to be completed in the second half of 2021, pending regulatory approvals. We all know how long it took for the T-Mobile and Sprint merger to happen, and while this isn't exactly the same type of acquisition, it's still possible it'll be faced with pushback and delays along the way.
I wonder what reason Verizon has for purchasing Tracfone. What does Tracfone have that Verizon doesn't already have?
21 million subscribers. They are buying the customers basically.
I'm pretty sure they're the only major carrier without a low-cost MVNO (unless you count Visible).
13 Million of TracFone's customers are already on Verizon's network, so far all intents are already Verizon customers, so now they buy out the middle man and gain 8 million new users from other networks. Hope they don't change anything, been with Total Wireless for 3 years, pay $95 for 4 lines and 100 GB of data, paid almost twice that with Verizon and less data. I am not optimistic, Verizon will find some wake to muck it up.
The ability to screw t-mobile, and att customers, that get tracfone thru them. I can see the future.
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