Verizon bent on TracFone buy even as prepaid brand loses subs

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Verizon really wants to buy TracFone, and it's not backing down, even when the Covid recovery means fewer people are drawn to prepaid. (Wave7 Research)

Verizon remains adamant that its nearly $7 billion acquisition of TracFone will close before the end of the year, yet lawmakers and consumer groups continue to push for conditions on a transaction they deem harmful to consumers.

This is all happening as the object of Verizon’s desire is losing subscribers. During its second-quarter earnings, TracFone owner América Móvil reported a loss of 549,000 prepaid customers at TracFone, which ended the quarter with 20.3 million subscribers compared with 20.9 million at the end of the first quarter.

TracFone’s Lifeline brand, called SafeLink, accounted for the majority of the losses, at 378,000. It’s also the brand most at the center of controversy. TracFone’s largest single brand, Straight Talk, reported losses of 106,000 for the quarter.

RELATED: Verizon swoops into prepaid with $6.9B Tracfone acquisition

According to Wave7 Research, TracFone’s loss is a bad sign for the prepaid sector. Granted, AT&T reported a stellar second quarter, with 174,000 prepaid additions. At Verizon, second-quarter prepaid subscribership increased by 18,000 net adds.