According to Yahoo Finance News, Verizon and Tracfone have agreed upon a deal. Below is text copied from the article (I added italics to denote copied text).
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.
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.
“This transaction is aligned with what we do best: providing reliable wireless service alongside a best-in-class customer experience,” said Hans Vestberg, Chairman and CEO of Verizon. “We are excited about the opportunity to bring Tracfone and its brands into the Verizon family where we can put the full support of Verizon behind this business and provide exciting and compelling products into this attractive segment of the market. We are pursuing this important strategic acquisition from a position of strength given our very strong and prudent financial profile.”
It will be interesting to see how this plays out, and whether or not the deal will eventually be a good thing for Tracfone customers.
No doubt our "regular" sources (Prepaid Compare, Prepaid Phone News, Best MVNO News, etc.) will be reporting on this soon, so please feel free to add links to their articles on this thread, too, along with your takes on the deal.
I expect this to be a disaster for consumers in the MVNO marketplace. In many ways, I'm more concerned about this than the T-Mobile/Sprint merger. There's plenty to hate about Tracfone, but I think there's plenty to love about what it's done to enable the MVNO marketplace for US consumers.
For almost as long as I've had a cellphone, Tracfone (and their other brands, including Simple Mobile, Total Wireless, Straight Talk, Page Plus, Net10, etc.) have been the gorilla in the room when it comes to getting concessions, and attractive pricing, from the Big 4. With 21 million customers, they are big enough to pull some serious weight in price structure, etc. Tracfone Group's pricing (and feature set) has been the price point that all smaller MVNOs have had to target, and had to beat, to be a viable alternative.
Tracfone has also established a reseller network that makes it easy, and possible, for nearly every consumer to access the MVNO world, regardless of access to dealer storefronts, credit, or internet access.
In many ways, Tracfone is a more viable competitor to the major carriers than Dish or the cable companies. I'll be writing to my congressional reps to oppose this..