Home - , , , , - T-Mobile Selling 1.7 Million Co-Branded Customers to an Unnamed MVNO

T-Mobile Selling 1.7 Million Co-Branded Customers to an Unnamed MVNO

In T-Mobile's 2nd quarter, 2016 investor's conference call (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 first theory, is that the Walmart Family Mobile sale is part of the same agreement that saw Ultra Mobile acquire Univision Mobile earlier this year. Because the agreement includes both sales and only one has occured, Carter can accurately say that the deal closes in the 3rd quarter. If I'm right that would mean that it's Ultra that's acquiring WFM. However, I believe that Ultra Mobile currently only has about 0.6 million customers. Absorbing 1.4 million more would more than triple Ultra's size which seems like a big challenge.

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.

22 comments:

Comment Page :
  1. I agree. It has to be Tracfone.

    ReplyDelete
  2. Walmart.com does sell Ultra Mobile SIM Cards and SIM Cards Kits that come with 1,3,6,12 Month Plans (Hidden Somewhat). Walmart Family Mobile has recently released (4) NEW devices.

    ReplyDelete
  3. I'm so curious about this. Such a mystery... Will keep an eye out to see how it develops...

    ReplyDelete
  4. Pricing on prepaid plan have dropped quite a bit over recent years. Incumbent carriers have also ramp up efforts on their own prepaid brands, which leave most of the MVNO non-competitive. It's nature these MVNOs will go away... I always through WFM was a bit odd - charging for SIM and charging for activation are not helping either. That said, these consolidation will consumers for joining a nonviable MVNO.

    ReplyDelete
    Replies
    1. The Walmart Family Mobile offerings never looked too good compared to the Straight Talk brand that's so prominently displayed in Walmart's electronics department.

      Delete
    2. Walmart Family Mobile is terrible compared to Straight Talk. Straight Talk has very good coverage. Walmart Family Mobile has the very small native-only T-Mobile footprint.

      When I first heard about Walmart Family Mobile, before I knew that T-Mobile only covered a small part of the country, I went to Walmart to ask them about it. On paper with the cost, Walmart Family Mobile looks like an incredible deal.

      The Walmart clerk laughed, and told me that Walmart Family Mobile was worthless. I'm glad they didn't try and sell to me a service that was cheap but would not let me use my phone to make phone calls except in a small part of the country.

      Delete
  5. I don't think this is part of the Univision/Ultra Mobile deal as it says they only entered into the agreement in June 2016.

    It also says "approximately 0.3 million branded prepaid customers would transition to being reported as wholesale customers."
    Which would mean that those 0.3 million customers aren't currently counted as wholesale/MVNO customers. That makes me think it can only be one of T-Mobile's own prepaid brands. It could be that T-Mobile considers GoSmart Mobile as a co-branded product. If I had to guess I'd say that T-Mobile is probably selling off the Walmart Family Mobile and GoSmart Mobile brands in order to focus on their much more successful MetroPCS and T-Mobile Prepaid brands. As Dennis said, the best guess for the buyer is America Movil. They'll probably shift their new customers onto the Straight Talk and Simple Mobile brands.

    ReplyDelete
  6. What about GoSmart Mobile?

    If they move those customers to wholesale, that will make their net numbers drop dramatically for the quarter.

    ReplyDelete
  7. The serfs are being sold to Big Slim.

    He'll take good care of them.

    Real good care, heh heh.

    ReplyDelete
    Replies
    1. Is he Gargamel?

      Delete
    2. You don't tug on Superman's cape.
      You don't spit into the wind.

      Delete
  8. Straight Talk introduced a new offering this week with a T-Mobile towered Alcatel handset with 7.5gb of 4gLTE data on the $45 plan and 15gb of 4g LTE data on the $55 plan. Interesting.

    ReplyDelete
    Replies
    1. Where? I'm not seeing any mention of $45 7.5 GB 0r $55 15 GB on the Straight Talk or Walmart sites or on HoFo or Turk Forums. Got a link?

      Delete
  9. Where can I find this deal?

    ReplyDelete
    Replies
    1. It's at straighttalk.com, shown under zip 34203.

      Delete
    2. Thanks, I found it. "Special Offer While Supplies Last! 50% More High Speed Data on this phone for life!" only with the Alcatel onetouch Pixi Glory LTE, model ALA621BL. It seems to be available in other markets with T-Mobile (GSM5) coverage including San FRancisco.

      Delete
  10. Could it be the $30 T-mobile prepaid plan users with 100 minutes and 5 GB of data? The plan was marketed as 'T-mobile prepaid', not co-branded with Walmart, but it was supposed to be exclusive to Walmart. It was sold in Walmart stores only, though you can also activate the plan on a new sim using t-mobile website if you dig around to find the well hidden option.

    ReplyDelete
  11. Any word on what this deal was?

    ReplyDelete
  12. Tracfone is going to acquire T-Mobiles' 1.7 Million Co-Branded Customers (Walmart Family Mobile)got this info from a seasoned Walmart Electronic/Entertainment Associate. Told me he just read a department memo on this to be acquisition.

    ReplyDelete
  13. As reported on HoFo, GoSmart and WFM's Terms and Conditions now reflect Tracfone ownership.

    http://www.howardforums.com/showthread.php/1887518-TracFone-acquiring-Gosmart-and-Walmart-Family-Mobile

    ReplyDelete
Comment Page :