transcript), CFO Braxton Carter revealed that the carrier is selling 1.7 million "co-branded" customers to a "current MVNO partner". Here's the quote:
In June 2016, we entered into an agreement under which we have agreed to sell our marketing and distribution rights to certain existing T-Mobile co-branded customers to a current MVNO partner. The transaction, expected to close late third quarter of 2016, is subject to regulatory approval and other closing conditions. Assuming closing, approximately 1.4 million branded postpaid phone customers and approximately 0.3 million branded prepaid customers would transition to being reported as wholesale customers.
Carter's statement raises the obvious question of which co-branded product or products T-Mobile is selling and which MVNO is doing the buying? Unfortunately we can only guess. The only current co-branded T-Mobile product I know of is Walmart Family Mobile (WFM), which uses the tagline "Powered by T-Mobile" as part of its logo. WFM is a no-contract postpaid operator and has been sold by America's largest retailer since 2010, so 1.4 million customers sounds about right. I'm almost certain that Walmart Family Mobile accounts for the 1.4 million postpaid customers being sold off.
If WFM accounts for the 1.4 million postpaid customers, where are the 0.3 million prepaids coming from? That's a tough question. To the best of my knowledge, WFM doesn't have any prepaid customers. The only possibilities I can think of are Univision Mobile and GoSmart. But there are problems with both. Univision Mobile has already been sold. It was acquired by Ultra Mobile in a deal that completed in February 2016. The problem with GoSmart is that, unlike Walmart Family Mobile and Univision Mobile, GoSmart isn't co-branded with another company. GoSmart and GoSmart Mobile are trademarks of T-Mobile USA, there's no independent GoSmart company and the T-Mobile CFO says the sale involves co-branded customers.
My other theory is that the acquirer is TracFone, which has a history of growth by acquisition and of acquiring million plus customer MVNOs. Tracfone bought 2.5 million customer Simple Mobile in 2012 and 1.4 million Page Plus in 2013. In addition, TracFone already partners with Walmart on its Walmart exclusive Straight Talk and Total Wireless brands. But a TracFone acquisition doesn't seem to account for those 0.3 million prepaid customers. Maybe WFM has some grandfathered customers from some long forgotten prepaid offering?
I'm stumped. What do my readers think. What's T-Mobile selling and who is doing the buying. Leave a comment if you think you know.
Hat tip to Jeff Moore of Wave7 Research who found the reference to the pending sale in the T-Mobile conference call and shared it with me. Theories about the nature of the sale and the parties and products involved expressed in this post are my own and not those of Wave7 research.