Verizon buys Tracfone in whooping $6 billion deal
It’s a thing of the bug dogs fight as the largest wireless network in the US buys the largest mobile virtual network operator
Verizon will acquire Tracfone in a deal worth more than $6 billion, the company made the announcement Monday. The deal means the largest mobile network virtual operator (MNVO) in the US will now be a part of the largest wireless provider in the country.
Tracfone remains the largest reseller of wireless services in the US, with over 21 million subscribers, around 850 employees, and a network of more than 90,000 retail locations. It’s owned by Mexico-based América Móvil, and along with the Tracfone brand, operates the Net10 and Straight Talk brands in the US.
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According to JustNaijaBase, More than 13 million Tracfone users rely on Verizon’s wireless network; Tracfone doesn’t run its own physical network in the US and instead rides on other cellphone carriers’ systems for a fee.
The purchase gives Verizon a stronger foothold in the value and low-income wireless segments. Verizon insists it will carry on to offer Tracfone’s Lifeline service, which allows qualifying customers to receive free smartphone and free monthly minutes, and StraightTalk, which offers prepaid, no-contract service phone plans.
The deal comes with a $3.125 billion of cash and $3.125 billion in Verizon common stock. Tracfone might get an additional $650 million cash payment tied to performance output. It’s expected to end in the second half of 2021.