TracFone Wireless Lecture Notes

Overview

• TracFone Wireless, Inc. (TFWI)
  • American wireless prepaid service provider
  • Mobile Virtual Network Operator (MVNO)
  • Offers prepaid and no-contract services on the Verizon network
  • Brands include:
    • TracFone
    • Straight Talk Wireless
    • Total Wireless
    • Simple Mobile
    • SafeLink Wireless
    • Walmart Family Mobile (partnership with Walmart)

Company Details

• Industry: Telecommunications
• Founded: 1996, Miami, Florida
• Defunct as independent: November 21, 2021
• Acquired by: Verizon
• Headquarters: Miami, Florida
• Retail Locations: 90,000
• Area Served: United States (including Hawaii, Alaska, Puerto Rico)
• Employees: 400+ (2008)
• Parent Company: Verizon Consumer

Historical Timeline

• 1996: Established as Topp Telecom Inc.
• 1999: Capital infusion from Telmex for $57.5 million (55% control)
• 2000: Became subsidiary of América Móvil, rebranded to TracFone Wireless
• 2009: Partnership with Walmart to launch Straight Talk Wireless
• 2012: América Móvil acquired Simple Mobile
• 2013: Purchased Page Plus Cellular (1.4 million subscribers)
• 2013-2014: Launched LTE services with major networks
• 2015: Expanded 'bring your own device' program
• 2020: Verizon announced acquisition
• 2021: FCC approved acquisition; transaction closed
• 2022: Verizon reorganized TracFone brands under Verizon Value division
• 2024: Rebranding Total Wireless to "Total by Verizon"

Legal Issues

• Roaming and Repair Issues (2007):
  • Class-action lawsuit
  • Allegations of misleading roaming charges, refusal to extend prepaid service during repairs
  • Settlement involved providing extra airtime
• Misleading "Unlimited" Plan Claims (2015):
  • FTC lawsuit for cutting off/slowing "unlimited" data
  • Resulted in $40 million in consumer refunds

Strategic Moves

• Acquisition by Verizon:
  • Valued at $6.9 billion
  • Integration into Verizon wireless business
• Regulatory Approvals:
  • FCC and CPUC mandated conditions, including Lifeline program participation
• Reorganization:
  • Consolidation of prepaid and low-cost brands
  • Expansion into dedicated retail outlets

Recent Developments

• Migration:
  • Customers of TracFone brands moving to Verizon SIM cards
• Brand Discontinuation:
  • Discontinuing GoSmart, Net10, Page Plus by 2024 (2026 in California)