Monday, 29 November 2021

FCC greenlights Verizon’s TracFone purchase

by Harry Baldock, Total Telecom
Tuesday 23 November 21

The Federal Communications Commission (FCC) will allow the deal to proceed, telling Verizon that it must protect low-income consumers from price increases and participate in a subsidy programme

Back in September 2020, Verizon announced that it would seek to purchase pre-paid mobile phone provider TracFone Wireless for $6.25 billion. TracFone, the largest reseller of wireless services in the US, has around 21 million subscribers and 90,000 retail locations, all of which would greatly enhance Verizon&rsquo…

Back in September 2020, Verizon announced that it would seek to purchase pre-paid mobile phone provider TracFone Wireless for $6.25 billion. TracFone, the largest reseller of wireless services in the US, has around 21 million subscribers and 90,000 retail locations, all of which would greatly enhance Verizon’s portfolio in the value segment. 

Since then, the deal has been going through a rigorous regulatory review by the FCC and other institutions, with fears the at the takeover could leave vulnerable TracFone customers subject to price hikes under the new ownership.

Now, the FCC has announced that it will approve the acquisition, attaching conditions to the deal that will protect TracFone customers in various ways, including guaranteeing affordable 5G handsets and avoiding price increases, all of which will be assessed regularly by an independent body.

“After rigorous review, the Commission found that the transaction, as modified by Verizon’s enforceable commitments, will make Verizon and Tracfone stronger providers of prepaid and Lifeline services,” the FCC in a statement. 

Verizon must also participate in a subsidy programme for low-income customers called Lifeline. This subsidy programme has been running in various forms since 1985 and was comprehensively modernised in 2016, now providing around $10 a month to help qualifying customers pay for broadband services. In total, Lifeline helps to support around 9.1 million people in the US to access discounted voice and broadband services. 

Currently, TracFone is already one of the largest providers taking part in the Lifeline programme, with 1.7 million low-income subscribers taking part across the country. 

Verizon has pledged to continue supporting the Lifeline programme for at least seven years.

 

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