TracFone surges ahead with 616,000 net adds in Q4, but falls short of year-ago growth

América Móvil's U.S. MVNO, TracFone Wireless, returned to a brisk pace of subscriber growth in the fourth quarter of 2013 after growth stalled in the third quarter. However, the company was unable to meet the subscriber growth it showed in the fourth quarter of 2012.

For the fourth quarter of 2013, TracFone added 616,000 net new customers to end the year with 23.7 million subscribers, 5.7 percent higher than at the end of 2012. The subscriber growth metric was up substantially from the measly 5,000 customers the carrier added in the third quarter. In the third quarter, as it did in the second quarter, TracFone reported that its net subscriber totals came in "after disconnections resulting from the revaluation of the conditions of certain commercial plans." The company has not disclosed what that exactly meant or what plans the company was referring to, though it could be due to eligibility changes in the FCC's Lifeline program, which TracFone offers through its SafeLink brand.

Despite its return to subscriber growth, TracFone failed to come close to the 753,000 subscribers it added during the year-ago period. The company noted that on Jan. 16 it completed its acquisition of substantially all of the assets of Start Wireless Group, which operated Page Plus Cellular, a Verizon Wireless MVNO with 1.4 million customers. The deal brings TracFone's total subscriber base to more than 25 million.

TracFone is by far the largest U.S. MVNO, and offers wireless service through several brands including TracFone, Straight Talk, Telcel America, Net10 and SafeLink.

In other quarterly metrics, TracFone said its fourth-quarter revenue totaled $1.54 billion, up 13.8 percent from $1.35 billion in the year-ago period, thanks largely to data revenues that expanded 39.6 percent. Average revenue per user grew 9.3 percent to $20 from $18 in the year-ago quarter. Churn declined to 3.6 percent from 3.9 percent in the year-ago period.

TracFone EBITDA for the period more than tripled compared to the year-earlier quarter, to $199 million. The company's EBITDA margin was equivalent to 7.7 percent of revenues, up from 2.8 percent a year ago.

For more:
- see this release (PDF)
- see this WSJ article (sub. req.)
- see this TelecomPaper article

Special Report: Wireless in the fourth quarter of 2013

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