TracFone acquires Verizon MVNO Page Plus Cellular and its 1.4M customers
América Móvil's U.S. MVNO, TracFone Wireless, acquired Start Wireless' Page Plus Cellular, an MVNO that counts around 1.4 million customers in the United States. The action is TracFone's second major acquisition after its purchase of T-Mobile US (NYSE:TMUS) MVNO Simple Mobile and its 1 million customers almost exactly a year ago.
As with Simple Mobile, América Móvil did not disclose the terms of its purchase of Page Plus. The Mexican company said it expects the transaction to close in the second quarter, pending regulatory approvals. América Móvil is owned by Mexican billionaire Carlos Slim.
Page Plus is primarily an MVNO of Verizon Wireless (NYSE:VZ). The company last year introduced a $69.95 prepaid plan geared toward smartphones. TracFone's purchase of the company could represent an attempt to both grow its subscriber base and solidify its MVNO relationship with Verizon.
TracFone is América Móvil's U.S. arm, and offers wireless service through several brands including TracFone, Straight Talk, Telcel America, Net10 and SafeLink. TracFone added 839,000 subscribers in the first quarter, América Móvil said, higher than the 369,000 net subscriber additions in the first quarter of 2012 and even higher than the 753,000 customers it added in the fourth quarter. TracFone is by far the largest MVNO in the United States and offers service through Verizon Wireless, AT&T Mobility (NYSE:T), Sprint Nextel (NYSE:S) and T-Mobile's networks. TracFone ended the first quarter with 23.2 million customers, a customer base that is 15.4 percent bigger than a year ago.
In January, TracFone's prepaid Straight Talk brand starting selling Apple's (NASDAQ:AAPL) iPhone, including the LTE-capable iPhone 5, coupled with unlimited talking, texting and data starting at $45 per month--significantly cheaper than what other carriers charge. Although neither company has confirmed the relationship, Verizon likely provides service to Straight Talk's iPhones. Straight Talk also supports existing GSM iPhones that users port to the service.
TracFone's purchase of Page Plus indicates the company plans to continue growing through both acquisitions and organic customer acquisitions. TracFone in the first quarter boosted its revenue by 39.8 percent year-over-year to $1.51 billion.
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