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Verizon Gives Insight on Its Plans to Acquire Tracfone

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A few months ago, Verizon expressed its interest in acquiring Tracfone from America Movil. This goes to show that the wireless carrier has started to show interest in the prepaid market and its potential. And today, we're getting more updates about Verizon's plans to purchase Tracfone and how this will change their strategy. 

At a Morgan Stanley event held yesterday, Verizon's Consumer Group CEO, Ronan Dunne, spoke about how the wireless carrier consider the prepaid segment as a "relatively small focus area." But given the way things are going, this doesn't seem to be the case anymore. 

"What I've seen inside Verizon is that the tools that we've been able to build, not just our network tools but our distribution tools and our billing and service tools and the analytics layer that we have on top of it, allowed us to be much more efficient in both our distribution and in our base management."

Verizon had already shown interest in acquiring the prepaid brand late last year as they started talks with Tracfone. This means that the decision did not come as a reaction to the events of this year, like the pandemic. Verizon shares that they haven't had much luck in prepaid, while Tracfone has excelled in this segment. This is why they are interested in buying Tracfone for almost $7 billion from America Movil. 

Right now, however, the acquisition has not yet been approved as it still requires regulatory approval. Not to mention, the recent filing from the Communications Workers of America (CWA) this week may cause some hurdle for the wireless carrier. They need to face these concerns before the acquisition can push through.  

Dunne did not address the concerns of the group but discussed their plans to grow the prepaid segment. He shares that they "have a partner who we know and understand" in Tracfone. Given, of course, that they've been partnering with the brand for over 15 years. 

"We see that as a great opportunity for us to build out Tracfone's capabilities and its brand portfolio so that it can expand the opportunity in the value segment."

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5 comments:

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  1. The TmoSprint network is becoming superior with each passing week as more cell sites are swapped out or upgraded to both 4G LTE and 5G on Tmobile.
    The hype from ATT and Verizon rings hollow until they get some make up laps.

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  2. Verizon will probably have to divest (sell to other MVNO's) all of the 7 million non-Verizon customers on Tracfon to get approval for the merger.

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  3. Tracfone has always made things right when there have been problems.
    They have also always made sure we've been given the benefit of better service and better prices over the years. Believe me, that is the last thing Verizon will do if they get control. Stick to being wholesaler sellers of airtime and data. We joined tracfone to get far away from you and the insane landline phone companies!

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  4. And TMO still have drop call issues. Fix that first please

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  5. You want Verizon to fix T-Mobile's issues?

    ReplyDelete
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