Sprint, i-wireless kill joint venture agreement, will continue separately with Lifeline

Sprint's Assurance Wireless continues to offer free services to customers who qualify for Lifeline services. Image: Sprint

Sprint confirmed to FierceWireless it terminated its plan to merge its Assurance Wireless brand with i-wireless’ Access Wireless business.

“Sprint and i-wireless made the mutual decision to terminate the joint venture agreement and will instead continue to operate as stand-alone Lifeline service providers,” Sprint said in a statement to FierceWireless in response to questions on the topic. “Moving forward, i-wireless will continue to operate as a Sprint MVNO.”

On its website, Assurance Wireless currently offers customers who qualify for Lifeline a free Android smartphone, 350 free minutes, unlimited free texts and 500 MB of free data each month. 

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Almost exactly a year ago, Sprint announced it would merge its Assurance Wireless brand with i-wireless’ Access Wireless, in a tie-up of Lifeline service providers. Under the agreement, Sprint would have owned 70% of the new business, which would have operated under the name i-wireless. I-wireless was to own the remaining 30%, and i-wireless founder and CEO Paul McAleese was to lead the combined business, which would have operated on Sprint's network.

Sprint and i-wireless’ decision to scrap the deal comes amid significant upheaval in the Lifeline sector of the wireless industry. Lifeline is a government program that provides subsidies for poor people to obtain wireless service. Sprint, TracFone and other wireless operators offer Lifeline services.

However, the FCC recently overhauled the Lifeline program, a move that forced a range of Lifeline providers to reduce their Lifeline subscriber counts. For example, last year TracFone partly blamed its 458,000 U.S. customer losses on the FCC’s Lifeline requirements that include disconnecting customers who aren't eligible.

Although Sprint doesn’t disclose the number of its Assurance customers, Wave7 Research said the company counted roughly 2.5 million Assurance customers in 2014.