Verizon Buys Tracfone

**offthegrid** · 09-14-2020, 09:40 AM

https://finance.yahoo.com/news/veriz...120100041.html

Verizon Communications (VZ) has phoned the executive team at Tracfone, and has inked a deal.

The communications giant (which is the parent company of Yahoo Finance) announced Monday it has acquired pre-paid wireless leader Tracfone. The cost of the transaction will include $3.125 billion in cash and $3.125 billion in Verizon common stock, subject to customary adjustments, at closing.

The agreement also includes up to an additional $650 million in future cash consideration related to the achievement of certain performance measures and other commercial arrangements...................................... ..........

**Jack Hagar** · 09-14-2020, 10:16 AM

It hasn't acquired anything yet since it has to be approved by regulators. Not sure how they get approval to keep all 21 million customers. T-Mobile had to give up Boost so it wouldn't dominate prepaid. I'm sure some kind of roaming deal in Mexico is included. Also for a mere $1 bill they could have bought 20 MHz of CBRS in the other 3100 counties in the US

**JoeInPa** · 09-14-2020, 12:19 PM

Originally Posted by Jack Hagar

Also for a mere $1 bill they could have bought 20 MHz of CBRS in the other 3100 counties in the US

To be fair though if Verizon would have been an active/aggressive bidder for those 3100 counties I highly doubt it would have stayed at 1 billion. The added competition would have driven up the cost. Maybe not a ton but it would have driven it up some (except for in the counties that did not sell all 7 pal’s)

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**JoeInPa** · 09-14-2020, 12:25 PM

Originally Posted by Jack Hagar

It hasn't acquired anything yet since it has to be approved by regulators. Not sure how they get approval to keep all 21 million customers. T-Mobile had to give up Boost so it wouldn't dominate prepaid. I'm sure some kind of roaming deal in Mexico is included.

The T-Mo/Sprint deal also included spectrum, equipment, tower sites, storefronts/leases ect.

This deal is a lot more straightforward. other than I’m assuming absorbing some employees Verizon is just mainly buying customers.

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**Haas_Dave** · 09-14-2020, 02:45 PM

Originally Posted by JoeInPa

The T-Mo/Sprint deal also included spectrum, equipment, tower sites, storefronts/leases ect.

This deal is a lot more straightforward. other than I’m assuming absorbing some employees Verizon is just mainly buying customers.

True.

Though this is kinda like Dish buying up Ting's customer base. It really looks like Verizon is wanting to retain #1 in subscriber numbers while not really investing much to actually improve the network for the customer base.

This is bad for the MVNO space if this passes, as TracFone had been able to pressure carriers into decent wholesale rates.

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**zapjb** · 09-14-2020, 04:35 PM

Hard for me to believe. I would of thought TF would worth at least 10B & this is 7B.

Does anybody know does this include Costa Rica, Mexico & other foreign countries that TF has business in or as in Costa Rica's case owns the whole cellular business of Costa Rica? I mean I think TF paid the government of Costa Rica 29B for 100% of the cellular industry.

**Haas_Dave** · 09-14-2020, 04:40 PM

Originally Posted by zapjb

Hard for me to believe. I would of thought TF would worth at least 10B & this is 7B.

Does anybody know does this include Costa Rica, Mexico & other foreign countries that TF has business in or as in Costa Rica's case owns the whole cellular business of Costa Rica? I mean I think TF paid the government of Costa Rica 29B for 100% of the cellular industry.

I presume the sale is just of the USA subsidiary, not America Movil as a whole.

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**zapjb** · 09-14-2020, 06:36 PM

I know this is early & I don't see other notifications of this sale. For me this is getting weirder & weirder. From the OP's Yahoo Finance linked article.

"...Tracfone boasts 21 million subscribers through a network of over 90,000 retail locations worldwide. The deal takes Verizon more into the lucrative value-oriented space of the wireless market..."

And there is no qualifying statement that this sale is only for TF USA business. So 7B for TF worldwide business is a STEAL for VZW. My goodness I'd like to hear more about the numbers because this doesn't make sense to me.

**Haas_Dave** · 09-14-2020, 06:43 PM

Originally Posted by zapjb

I know this is early & I don't see other notifications of this sale. For this is getting weirder & weirder. From the OP's Yahoo Finance linked article.

"...Tracfone boasts 21 million subscribers through a network of over 90,000 retail locations worldwide. The deal takes Verizon more into the lucrative value-oriented space of the wireless market..."

And there is no qualifying statement that this sale is only for TF USA business. So 7B for TF worldwide business is a STEAL for VZW. My goodness I'd like to hear more about the numbers because this doesn't make sense to me.

https://www.verizon.com/about/news/v...quire-tracfone

The Verizon Press Release, which the article appears to quote/paraphrase from, says nationwide not worldwide. The infographic Verizon provides also says the same.
It's possible Verizon had the statement worded as the article stated and then edited it. The PR does make it sound like Verizon is only acquiring the US assets, not America Movil as a whole or any non-US assets.

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**kevink1** · 09-14-2020, 06:50 PM

Originally Posted by zapjb

I know this is early & I don't see other notifications of this sale. For this is getting weirder & weirder. From the OP's Yahoo Finance linked article.

"...Tracfone boasts 21 million subscribers through a network of over 90,000 retail locations worldwide. The deal takes Verizon more into the lucrative value-oriented space of the wireless market..."

And there is no qualifying statement that this sale is only for TF USA business. So 7B for TF worldwide business is a STEAL for VZW. My goodness I'd like to hear more about the numbers because this doesn't make sense to me.

Tracfone appears to be US only. America Movil, which currently owns it, has 277 million customers as of 2019 worldwide.

**zapjb** · 09-14-2020, 07:25 PM

Oh ok TF USA only makes more sense. Specially so a foreign owner isn't forced to sell their USA branch. Rather AM is selling on it's own terms. And I agree with above this could be very very bad for USA MVNO's as a whole. Frankly I'm gobsmacked by this sale. I never thought AM would sell this cash cow. If VZW doesn't screw this up like ATT's TWC debacle & others. Then VZW can transfer these customers onto the VZW backbone.

**WaltA** · 09-14-2020, 07:36 PM

Tracfone, and its parts like Page Plus, are already "kind of" VZW customers. Just indirect thru those MVNO's.

Is VZW trying to kill the USA MVNO market?

**kevink1** · 09-14-2020, 07:44 PM

There are so many brands that I don't know how much of the MVNO market this absorbs.

But this happens while T-Mobile is distracted with absorbing Sprint. And ATT is distracted with their TV ventures.

Looks like Tracfone is about 8 "brands", of which I've heard of 7. I wonder whether there will be a consolidation.

Or whether the brands will be segregated by type of plan, or features.

**loboheeler** · 09-14-2020, 07:51 PM

Originally Posted by Jack Hagar

It hasn't acquired anything yet since it has to be approved by regulators. Not sure how they get approval to keep all 21 million customers.

Only 62% of Tracfone Wireless customers are using the Verizon network, so there will be a lot of displaced customers if AT&T and T-Mobile are ousted as an option. That is quite disrupting, and the regulators should take it into account.

**zapjb** · 09-14-2020, 07:57 PM

Originally Posted by kevink1

There are so many brands that I don't know how much of the MVNO market this absorbs...

If you want prepaidcompare . net has an estimated subscriber base of the MVNO's individually. I wouldn't be surprised if the total subscriber base for all MVNO's except TF's is 5 million or less. I think if approved this could behead the MVNO model of today.