Verizon is buying Tracfone in a deal worth more than $6 billion, the company announced Monday. The deal means the largest mobile network virtual operator (MNVO) in the US will become part of the largest wireless provider in the country.
Tracfone is the largest reseller of wireless services in the US, with 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. More than 13 million Tracfone customers already 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 acquisition gives Verizon a bigger foothold in the value and low-income wireless segments. Verizon says it will continue to offer Tracfone’s Lifeline service, which allows qualifying customers to receive free phones and free monthly minutes, and StraightTalk, which offers prepaid, no-contract service phone plans.
The deal will include $3.125 billion of cash and $3.125 billion in Verizon common stock. Tracfone could also receive an additional $650 million cash payment tied to performance measures. It’s expected to close in the second half of 2021.