América Móvil's U.S. TracFone unit notched 493,000 subscriber additions in the fourth quarter as its subscriber growth slowed. However, the unit's revenue boomed amid higher usage, crossing $1 billion.
TracFone, which sells the flat-rate, prepaid Straight Talk service and operates as an MVNO using Verizon Wireless (NYSE:VZ), AT&T Mobility (NYSE:T), T-Mobile USA and Sprint Nextel's (NYSE:S) networks, had revenue of $1.03 billion in the quarter, up nearly 31 percent from the $789 million it had in the year-ago period. However, subscriber growth was weaker than the 1.1 million total subscribers TracFone added in the fourth quarter of 2010 and the 515,000 it netted in the third quarter of 2011. TracFone ended the quarter with 19.76 million total subscribers, up from 17.74 million at the end of 2010.
TracFone's average revenue per user was $16, up from $14 in the year-ago quarter. Additionally, average monthly minutes of use per subscriber climbed to 396 from 300 in the year-ago quarter, which the company said was a reflection of the higher percentage of users on its Straight Talk plans, which are sold primarily through Walmart. Churn stayed flat at 4.1 percent.
In a move that may affect TracFone, the FCC recently voted to reform its Lifeline phone subsidy program to stamp out waste and fraud by limiting people in the program from claiming subsidized handsets from multiple wireless carriers. TracFone is the largest Lifeline service provider via its SafeLink offering, which counts more than 2 million customers.
Additionally, Straight Talk service will reportedly soon launch a high-end Android smartphone running on T-Mobile USA's HSPA+ network, a move that would break Sprint's hold as the provider of service for Straight Talk Android phones. According to BTIG analyst Walter Piecyk, Straight Talk will soon launch the LG Optimus 2X and it will support T-Mobile's HSPA+ network, marketed as "4G."
- see this release (PDF)
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