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TracFone Wireless

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TracFone Wireless, Inc.
Company typeSubsidiary
IndustryTelecommunications
PredecessorTopp Telecom, Inc.
FoundedMiami, Florida, United States (1996 (1996))
Headquarters
Miami, Florida
,
United States
Number of locations
90,000 retail locations
Area served
United States (incl. Hawaii, Alaska, and Puerto Rico)
Products
  • Clearway Wireless for Business
  • Claro Enterprise Solutions
  • GoSmart Mobile
  • Net10 Wireless
  • Page Plus Cellular
  • SafeLink Wireless
  • Simple Mobile
  • Straight Talk Wireless
  • Telcel América
  • Total by Verizon
  • TracFone
  • Walmart Family Mobile
ServicesPrepaid mobile virtual network operator
ParentVerizon Communications (100%)
Websitewww.tracfonewirelessinc.com

TracFone Wireless, Inc. (TFWI) is an American prepaid, no-contract mobile phone provider. TFWI is a subsidiary of Verizon Communications, and offers products and services under several brands. It operates as a mobile virtual network operator (MVNO), holding agreements with the three largest United States wireless network operators to provide service: AT&T Mobility, T-Mobile US, and Verizon.[1][2]

In 2021, Verizon acquired TracFone Wireless, Inc. from Mexico-based América Móvil in a deal worth up to $6.9 billion, involving 20 million subscribers. The deal was approved by the FCC on November 22, 2021 and closed the following day.[3][4][5]

History

TracFone Wireless, Inc. was established in 1996 as Topp Telecom Inc., a prepaid mobile phone company, in Miami, Florida. It was founded by David Topp and F.J. Pollak. Pollak acted as the CEO of Tracfone until his death in 2016. [6] In February 1999, Topp received a major infusion of capital from Teléfonos de México (NYSE: TMX), a.k.a. TelMex, Mexico's largest telephone company. TelMex paid $57.5 million for a 55 percent controlling interest in the company.[7]

In 2000, TelMex spun off their mobile unit, creating América Móvil, of which Topp Telecom became a subsidiary. In November 2000, Topp Telecom Inc. changed its name to TracFone Wireless Inc.[8]

In 2012, América Móvil acquired rival network Simple Mobile.

In May 2013, América Móvil purchased Page Plus Cellular, which had 1.4 million subscribers. On January 6, 2014, regulatory approval was received and Page Plus Cellular began operating as a subsidiary of América Móvil.

Originally, TracFone service was limited to TracFone-branded phones, which are locked to the TracFone service using an internal SIM card. Other GSM phones, even those that were unlocked from another carrier, could not accept a TracFone SIM card, because these are bound to a specific handset. In 2013, TracFone began to open up its device pool with a 'bring your own phone' program, selling SIM cards that could be inserted into qualifying non-TracFone phones (such as Verizon CDMA phones) to connect with the TracFone network.[9] In 2015, the program was expanded to unlocked and compatible GSM handsets.

On September 14, 2020, Verizon Wireless announced its intent to acquire TracFone in a cash-and-stock deal worth up to $6.9 billion. The deal closed on November 23, 2021.[3][10][11][5]

The acquisition is bringing about many changes in TracFone's services, including the likelihood that Verizon may drop existing MVNO agreements with AT&T and T-Mobile, the two mobile service providers using GSM technology as opposed to Verizon's CDMA service, and in the process losing two-thirds of TracFone's customers. In September 2022, TracFone brands such as Straight Talk stopped selling GSM-only phones and AT&T and T-Mobile compatible SIM cards on their website. Current TracFone GSM customers are being encouraged to purchase new CDMA phones that use Verizon only. Though TracFone still supports the GSM service on AT&T and T-Mobile towers, customers are being warned that this service will eventually no longer work, although an exact date for its discontinuance is not given.

Other brands and subsidiaries

Besides the Tracfone brand, TracFone Wireless operates several other brands and services: Clearway, Claro, GoSmart, Net10, Page Plus, SafeLink, Simple, Straight Talk, Telcel, Total, and Walmart Family.[6][12]

Clearway Wireless (stylized as Clearway Wireless for Business) is a TracFone brand of wireless service exclusively for businesses to provide mobile services to their employees and clients.

On September 1, 2022, Clearway announced it was shutting down their website in preparation for transition of its customers to Verizon.[13]

Claro Enterprise Solutions, LLC (stylized as Claro USA) is the United States subsidiary of Claro, a mobile telephone service in Mexico owned by América Móvil. In June 2018, the USA subsidiary of Telmex (a competing Mexican mobile service), "Telmex USA", was purchased by América Móvil, who changed the name to Claro Enterprise Solutions,[14] and assigned it to be operated as a subsidiary brand of TracFone.

In November 2021, Verizon purchased TracFone from América Móvil, and acquired all its subsidiary brands except for Claro USA. While América Móvil continues to own Claro and Claro USA, TracFone has remained as the USA distributor for Claro.[15]

GoSmart Mobile was purchased by TracFone from T-Mobile, along with Walmart Family Mobile, in September 2016.[16] GoSmart was previously a T-Mobile subsidiary that became available in the US on February 19, 2013.[17]

Net10 Wireless (stylized NET10 Wireless) is a subsidiary of TracFone Wireless which offers no-contract phone plans.[18]

Page Plus Cellular is a prepaid MVNO in the United States operated by TracFone Wireless, Inc.[19] In May 2013, América Móvil purchased Page Plus Cellular for an undisclosed amount.[20]

SafeLink Wireless is a Lifeline supported service for low-income consumers in the United States.[21] Lifeline is funded through the Universal Service Fund, and managed by the U.S. Federal Communications Commission (FCC).[22]

Per the FCC's ruling and the U.S. Department of Justice's settlement with TracFone and Verizon Communications Inc, upon Verizon's November 23, 2021 acquisition of TracFone, Verizon will continue to offer LifeLine services under the TracFone brand SafeLink for seven years, and ensuring the same rates and plans for current SafeLink customers for three years.[23][24][25][26]

Simple Mobile Inc. (stylized SIMPLE Mobile) was founded in November 2009 as a prepaid mobile network operator of T-Mobile.[27] Simple Mobile Inc. was acquired by TracFone Wireless in 2012. América Móvil, TFWI's parent company, acquired Simple Mobile in June 2012 and incorporated it as a subsidiary of TracFone Wireless.[28]

Beginning in February 2021, TracFone's USA brand of Mexico's Telcel, called "Telcel América", folded into TracFone's brand Simple Mobile and its customers were moved over.[29][30]

Straight Talk Wireless was launched on October 18, 2009 as a no-contract phone plan service. As part of an agreement with Walmart, they are the exclusive retailer for Straight Talk.[31]

Telcel América is a wireless service from TracFone that allows its users to call internationally.[32] Telcel América is the United States subsidiary of Telcel, a mobile telephone service in Mexico owned by América Móvil. The brand is operated by TracFone Inc.

In February 2021, its customers were folded into TracFone's brand Simple Mobile.[29][30] However, TracFone continues to be the USA distributor for Telcel.[33]

Total by Verizon is an MVNO that uses the Verizon network.[34] It is a subsidiary of TracFone Wireless.[35]

"Total Wireless" was its original name. After Verizon acquired TracFone the name was changed in 2022 to "Total by Verizon", and while it is still handled by TracFone as their brand, it will eventually be exclusively through Verizon Wireless.

Walmart Family Mobile (along with GoSmart Mobile) was purchased by TracFone from T-Mobile in September 2016.[16] Like Straight Talk Wireless, Walmart Family Mobile's exclusive retailer is Walmart.

Roaming and repair issues

On February 9, 2007, a preliminary settlement in a class-action lawsuit against TracFone was carried out by Jeanette Wagner, and approved in the Boone County Circuit Court in Kentucky.[36][37] The complainants alleged that TracFone misled consumers by charging a roaming rate in their home calling area (they were charged for 2 units per minute, not the usual 1 unit per minute), and that it refused to extend their prepaid service time during handset repairs. As a result of the settlement, Tracfone gave each of their customers an extra 20 units of airtime.

Misleading "unlimited" plan claims

In January 2015, the Federal Trade Commission started a class action lawsuit naming TracFone and its affiliates, saying that the company cut off or slowed down "unlimited" data to its customers after they reached a fixed limit. TracFone was being sued over lying to their consumers, advertising "unlimited" data, referring to the amount of data available in a 30-day period, without disclosing that speed would be reduced (throttled) after a hidden fixed amount of data had been used.[38][39] This led to $40 million in consumer refunds as a result.[40]

Networks and coverage

TracFone Wireless uses the networks of major wireless providers to offer service, the coverage of which varies by the provider for each device. Retail boxes indicate the network with a code printed in the lower right corner on the back of the box.

Network Box code Technology LTE since
AT&T GSM-A, LTE-G GSM September 2013
T-Mobile GSM-T GSM March 2014
Verizon CDMA-V, LTE-V CDMA December 2014

See also

References

  1. ^ "About Us". TracFone Wireless. Retrieved December 27, 2012.
  2. ^ "TracFone prepares a nationwide SmartSIM program". FierceWireless. January 13, 2020. Retrieved September 2, 2020.
  3. ^ a b Fletcher, Bevin (September 14, 2020). "Verizon swoops into prepaid with $6.9B Tracfone acquisition". FierceWireless.
  4. ^ Kelly, Makena (November 22, 2021). "FCC approves $6 billion Verizon-Tracfone acquisition". The Verge. Retrieved November 23, 2021.
  5. ^ a b "Verizon completes TracFone Wireless, Inc. acquisition (press release)". www.verizon.com. November 23, 2021. Retrieved November 23, 2021.
  6. ^ a b Cohen, Howard (April 8, 2016). "TracFone CEO, Cushman School supporter F.J. Pollak dies at 53". Miami Herald.
  7. ^ Commisso, Marco (May 3, 1999). "Miami company prepares prepaid cell-phone invasion". South Florida Business Journal.
  8. ^ "Miami Company Prepares Prepaid Cell-Phone Invasion". South Florida Business Journal. Retrieved December 18, 2009.
  9. ^ "TracFone's Straight Talk starts BYOD iPhone program". FierceWireless. January 18, 2013.
  10. ^ Mihalcik, Carrie (September 14, 2020). "Verizon to acquire prepaid mobile provider Tracfone". CNET. Retrieved September 14, 2020.
  11. ^ Gagliordi, Natalie. "Verizon acquires Tracfone in $6.25 billion deal". ZDNet. Retrieved September 17, 2020.
  12. ^ TracFone Wireless, Inc. Brands
  13. ^ ClearWay
  14. ^ América Móvil. "América Móvil announces the expansion of Claro into the U.S." www.prnewswire.com.
  15. ^ "Contact Claro Enterprise Solutions". www.usclaro.com.
  16. ^ a b Gibbs, Colin (October 5, 2016). "Confirmed: TracFone acquires Walmart Family Mobile from T-Mobile, deal estimated to cover 1.4M customers". FierceWireless.
  17. ^ Heater, Brian (February 19, 2013). "T-Mobile launches prepaid GoSmart Mobile service starting at $30 a month, promises 'FreeDUM'". Engadget.
  18. ^ Henry, Alan (November 10, 2013). "Five Best Pre-Paid Cellphone Carriers". Lifehacker.
  19. ^ Saabedra, Humberto (May 20, 2013). "America Movil to Buy Page Plus Cellular Parent Start Wireless Group". PhoneNews.com.
  20. ^ Dano, Mike (May 20, 2013). "TracFone acquires Verizon MVNO Page Plus Cellular and its 1.4M customers". FierceWireless.com.
  21. ^ "TracFone Fined $6m For Violating Lifeline Program Rules - Tech". LawStreetMedia. August 29, 2020.
  22. ^ "Information on Subsidized Phone Service". Lifeline.gov. Federal Communications Commission.
  23. ^ Tabacco, Christina. "FCC Approves Verizon's Acquisition of Lifeline Service Provider Tracfone with Conditions".
  24. ^ Alleven, Monica (April 4, 2022). "Verizon's TracFone reaches $13.4M settlement over Lifeline". Fierce Wireless.
  25. ^ Alleven, Monica (August 12, 2021). "Verizon satisfies groups opposed to TracFone deal". Fierce Wireless.
  26. ^ "U.S. FCC approves Verizon acquisition of TracFone Wireless". finance.yahoo.com.
  27. ^ Bean, Daniel (February 8, 2019). "What Is Simple Mobile, and Is It Worth It?". Tom's Guide.
  28. ^ "Mexico's America Movil buys US firm Simple Mobile". Associated Press. May 10, 2012.
  29. ^ a b "Telcel Customers are now a part of the SIMPLE Mobile Family". telcel.com. TracFone Wireless, Inc. 2020. Retrieved February 18, 2021.
  30. ^ a b Paonessa, Joe (January 13, 2021). "Telcel Is Being Folded Into Simple Mobile". BestMVNO.com. BestMVNO. Retrieved February 18, 2021.
  31. ^ Yam, Marcus (October 15, 2009). "Wal-Mart to Offer Contract-free Cell Phone Plans". Tom's Guide.
  32. ^ Dano, Mike (December 10, 2012). "TracFone's Telcel America to leverage América Móvil ties with cheap calling to Mexico". FierceWireless.
  33. ^ TracFone Wireless, Inc. is using Telcel with permission from Administradora de Marcas RD, S. de R.L. de C.V.
  34. ^ "Total Wireless: Is it a Good Alternative to Verizon? [Review]". WomenWhoMoney. April 26, 2018.
  35. ^ "Total Wireless Buyer's Guide". AndroidGuys. September 20, 2019.
  36. ^ "News Northern Kentucky | The Enquirer". Cincinnati.com. Retrieved December 27, 2019.
  37. ^ "TracFone Wireless Inc. Roaming Fees Class Action Settlement". Class action news consumers can use. Retrieved February 6, 2011.
  38. ^ Farnham, Alan (July 30, 2013). "Class Action Suit Claims Walmart and TracFone Mislead Phone Customers". ABC News.
  39. ^ Morran, Chris (January 28, 2015). "TracFone To Refund $40 Million To Customers For Deceptive "Unlimited" Data Claims". Consumerist.
  40. ^ Moscaritolo, Angela (January 28, 2015). "TracFone Fined $40M for Throttling 'Unlimited' Data Plans". PCMAG. Retrieved August 29, 2020.
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