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TracFone Wireless

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Trac-Fone Wireless Inc.
Company typeSubsidiary of América Móvil
(NYSE: AMX, BMV: AMX Nasdaq: AMOV)
IndustryWireless Services
FoundedTopp Telecom, Inc., announces the company's name transition to TracFone Wireless, Inc on November 15 2000
HeadquartersUnited StatesMiami, Florida, USA
Key people
F.J. Pollak (President and CEO)
ProductsTDMA CDMA GSM
RevenueIncrease$1.3 billion USD (2006)[1]
Increase$88 million USD (2006)
Number of employees
400+ (2006)
ParentAmérica Móvil (98.2%)
Others (1.8%)
Websitewww.tracfone.com

TracFone Wireless or TracFone is a mobile phone provider, subsidiary of América Móvil the largest Latin American mobile network operator ; that provides prepaid wireless service in the United States, Puerto Rico and the Virgin Islands. TracFone is currently the sixth-largest mobile network operator and the largest mobile virtual network operator in the U.S. market with 8.803 million customers (as of September 2007). [2]


History

Formerly known as Topp Telecom Inc., It was a prepaid company created on 1996 and established in Miami Florida, the company has grown into the prepaid leader of the United States. In February 1999, Topp received a major infusion of capital from Telefonos de Mexico or Telmex NYSE: TMX, Mexico's largest telephone company and supplier of telephone services throughout Latin America, TelMex paid $57.5 million for a 55 percent controlling interest in the company. In 2000, Telmex spun off their mobile unit, creating América Móvil , which would be free to develop as its own business as an independent entity becoming Topp Telecom a subsidiary of the new Mexican mobile company. In November 2000, Topp Telecom Inc. has changed its name to TracFone Wireless Inc.. [3]

Service

TracFone provides two brands of service: TracFone and Net10. The main difference is the logo and the prepaid minute rates and service options. Currently NET10 only offers GSM service but plans to add CDMA service.

TracFone

The service allows a customer to buy airtime units to use on selected phones by Nokia, LG, and Motorola pursuant to a licensing agreement. TracFone sells digital cell phone models, although analog phones were once available. Depending on the region, TracFone service works in a GSM, TDMA, or CDMA network. TracFone does not build its own wireless network but "resells" wireless service from more than 30 providers, as a mobile virtual network operator (MVNO). In the United States, TracFone operates on the AT&T, Verizon Wireless, Sprint, and T-Mobile networks, among others (such as Alltel and US Cellular).

TracFone during this year has been upgrading the Analog and TDMA technology in order to only provide digital (CDMA) and GSM technology across the United States, TracFone has been upgrading almost all the customers cellphones since November 2006 (due to complete in October 2007) as TracFone cannot guarantee the quality of coverage for those olders technologies. Most of the customers are migrating into CDMA or GSM technology according the local area where the customer should be using the phone the most.

TracFone requires the customer to activate a cell phone before use. Activation consists of calling the TracFone hotline number or going to the TracFone website and entering programming codes directly into the phone or by using the OTA feature (through radio waves provided by the customer local tower). The customer redeems units by entering a validation code into the phone or by using the OTA feature (Over the Air) on the prepaid menu, also known as the Redeem Airtime option. A single unit roughly equates to one minute of telephone airtime. Receiving SMS text messages is free on the Nokia 1100, 2600, and 3390 models and the Motorola V170 and C155 models but costs 0.3 units on the Motorola C139, C261, V176, and W370 models to open the received message. Sending SMS text messages costs 0.3 units on all GSM models. Sending or receiving SMS text messages costs .5 units on TDMA and CDMA models.[4]

To keep the service active, customers must avoid running out of airtime units (minutes) and days of service. These can be purchased in various combinations. For example, the $90 "1 Year Card" provides 400 minutes and 365 days of service (September 2007). Purchased airtime units are added to the previous balance and never expire. Purchased days of service are appended after the previous end of service date so that no days are lost by extending in advance of the due date. If a customer does not add airtime before the due date (displayed on the handset), the service, the TracFone phone number and any remaining units are lost. If service is reactivated within 60 days, the customer retains existing units on the handset. With GSM phones if the number is lost the customer will need to be sent a new SIM card (this is free of charge but the customer will have to wait 3-5 days).

Customer service

In contrast to the popularity of the TracFone service, there have also been some complaints regarding TracFone's customer service practices. Example complaint reports can be found at Consumer Affairs regarding the quality of the product, the limitations of the service, and the business practices of the company.[3]

TracFone customer service is outsourced to several companies, mostly in Latin America; TracFone's customer care centers are located in:

TracFone's main goal is to perform a one-call resolution.

On February 9, 2007, a preliminary settlement in a class-action lawsuit against TracFone was approved in the Boone (County) Circuit Court in Kentucky.[4] There is a case settlement website that certain TracFone owners can use to file a claim to receive a portion of the settlement.

Handset bulk purchasing

TracFone handsets are known to be purchased by resellers and unlocked, in order to be sold overseas. As TracFone subsidizes the handsets, and wish to reclaim their investment, they are known to have launched an extensive campaign against bulk resellers. Retailers have been instructed to sell only two phones at a time and the company has filed numerous lawsuits against such resellers.

The legality of the practice is unknown, as the Copyright Office have enacted an exemption for unlocking a phone if done "for the sole purpose of lawfully connecting to another wireless network." As the ultimate goal of unlocking the phone is to connect to another network, it is a possibility that the practice would be able to stand up if challenged in court; however, this has yet to happen. Another problem is that as the phones are being sold overseas, they can also be unlocked overseas, meaning the violation of the DMCA is irrelevant.

Competitors

Prepaid Wireless

Notes and references

  1. ^ [1]
  2. ^ [2]
  3. ^ http://southflorida.bizjournals.com/southflorida/stories/1999/05/03/focus4.html
  4. ^ http://www.howardforums.com/showthread.php?t=1127357

Template:Puerto Rican mobile phone companies

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