Sprint said it will merge its Assurance Wireless brand with Access Wireless in a tie-up of Lifeline service providers.
Sprint will own 70 percent of the new business, which will operate under the name i-wireless, Access's brand for Lifetime users. I-wireless will own the remaining 30 percent. I-wireless founder and CEO Paul McAleese will lead the combined business, and i-wireless will continue to operate on Sprint's network.
Lifeline, which launched during the Reagan administration and was expanded to include mobile phones in 2005, provides discounted service to low-income consumers. The FCC voted in March to expand the program to cover fixed-line and mobile broadband service; the expansion also included a provision for the creation of a new third-party verification system to prevent the fraud that has long plagued Lifeline.
"This alliance will create a vibrant competitor ready to embrace a modernized Lifeline program," McAleese said in a press release. "As the category transitions to broadband, we're enthusiastic about the potential to help customers more fully participate in today's digital economy by making access to employment, education and healthcare services more affordable to low-income consumers."
I-wireless is owned by Kroger, the nation's largest supermarket chain by revenue. Sprint said the move will enable the new business two leverage its nationwide network and i-wireless's distribution footprint, which consists largely of Kroger grocery stores.
"I-wireless has a unique competitive advantage in its ability to accurately and efficiently qualify new customers for Lifeline services through a relationship with its strategic investor, The Kroger Co.," according to Sprint's press release.
Sprint's Virgin Mobile brand was forced to shed 1.6 million Lifeline customers three years ago when a federally required check found many users no longer qualified to receive the subsidies. Verizon, AT&T and other service providers also lost Lifeline users due to the FCC's overhaul, although none lost as many as Virgin Mobile.
- see this Sprint press release
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