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TracFone Wireless

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TracFone Wireless, Inc.
IndustryTelecommunications
PredecessorTopp Telecom, Inc.
Founded1996; 28 years ago (1996), in Miami, Florida, United States
DefunctNovember 21, 2021 (2021-11-21) (as an independent company)
FateAcquired by Verizon
Headquarters
Miami, Florida
,
United States
Number of locations
90,000 retail locations
Area served
United States (including Hawaii, Alaska, and Puerto Rico)
ServicesPrepaid mobile virtual network operator
7,000
Number of employees
400+ (2008)
ParentVerizon Consumer
Websitewww.tracfonewirelessinc.com/en/home//
Footnotes / references
[1]

TracFone Wireless, Inc. (TFWI) is an American wireless prepaid service provider. It is a mobile virtual network operator offering prepaid and no-contract services on the Verizon network under multiple brands, including TracFone, Straight Talk Wireless, Total Wireless, Simple Mobile, SafeLink Wireless, Page Plus Cellular, Net10 Wireless, GoSmart Mobile, and Walmart Family Mobile (in partnership with Walmart).

In 2021, Verizon acquired TracFone Wireless from América Móvil in a transaction valued at around $6.9 billion. TracFone's portfolio of brands were integrated into the Verizon wireless business.

History

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TracFone Wireless was established in 1996 as Topp Telecom Inc., a prepaid mobile phone company, in Miami, Florida. It was founded by David Topp and F.J. Pollak. Pollak acted as the CEO of Tracfone until his death in 2016. [2] In February 1999, Topp received a major infusion of capital from Telmex, Mexico's largest telephone company. Telmex paid $57.5 million for a 55 percent controlling interest in the company.[3]

In 2000, Telmex spun off their mobile unit, creating América Móvil, of which Topp Telecom became a subsidiary. In November 2000, Topp Telecom Inc. changed its name to TracFone Wireless Inc.[4] In 2009, TracFone partnered with Walmart to launch its MVNO Straight Talk Wireless.[5]

In 2012, América Móvil acquired rival network Simple Mobile. In May 2013, América Móvil purchased Page Plus Cellular, which had 1.4 million subscribers.[6]

LTE service was inaugurated by TracFone's brands over a year and a half, with Sprint networks handsets first supporting it in May 2013, followed by AT&T four months later in September, then T-Mobile in March 2014. Verizon's TracFone headsets began to be supported in December 2014.

Originally, TracFone service was limited to TracFone-branded phones, which are locked to the TracFone service using an internal SIM card. Other GSM phones, even those that were unlocked from another carrier, could not accept a TracFone SIM card, because these are bound to a specific handset. In 2013, TracFone began to open up its device pool with a 'bring your own device' program, selling SIM cards that could be inserted into qualifying non-TracFone phones (such as Verizon CDMA phones) to connect with the TracFone network.[7] In 2015, the program was expanded to unlocked and compatible GSM handsets.

On September 14, 2020, Verizon announced its intent to acquire TracFone Wireless in a cash-and-stock deal worth up to $6.9 billion. At the time of the purchase, TracFone's brands had around 20 million customers in total.[8] The acquisition was approved by the Federal Communications Commission (FCC) on November 22, 2021, and closed the following day. As part of the purchase, Verizon agreed to provide "cost-effective" 5G services to Lifeline program participants, and continue its participation in the subsidy program for at least seven years. The California Public Utilities Commission (CPUC) mandated further requirements, including that all California customers of TracFone services must be migrated to the Verizon network, Verizon must participate in Lifeline for 20 years and expand its customer base in the program, offer 5G devices at no cost to these customers, and maintain comparable prices for five years.[9][10][11]

In November 2022, Verizon reorganized its portfolio of prepaid and low-cost brands into the new Verizon Value division led by Angie Klein, encompassing TracFone and its existing Verizon Prepaid and Visible businesses.[12] Verizon announced that it would discontinue the GoSmart, Net10, and Page Plus brands in November 2024 (November 2026 in California).[13] Customers of TracFone brands are being migrated to Verizon SIM cards and devices.[14]

Verizon rebranded Total Wireless as "Total by Verizon" on September 21, 2022, with the company positioning it as a competitor to AT&T's Cricket Wireless and T-Mobile's Metro. Verizon also began to open dedicated retail outlets. On July 11, 2024, the Total Wireless name was reinstated as part of a rebranding, and started to only offer unlimited plans.[15]

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Roaming and repair issues

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On February 9, 2007, a preliminary settlement in a class-action lawsuit against TracFone was carried out by Jeanette Wagner, and approved in the Boone County Circuit Court in Kentucky.[16][17] The complainants alleged that TracFone misled consumers by charging a roaming rate in their home calling area (they were charged for 2 units per minute, not the usual 1 unit per minute), and that it refused to extend their prepaid service time during handset repairs. As a result of the settlement, Tracfone gave each of their customers an extra 20 units of airtime.

Misleading "unlimited" plan claims

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In January 2015, the Federal Trade Commission started a class action lawsuit naming TracFone and its affiliates, saying that the company cut off or slowed down "unlimited" data to its customers after they reached a fixed 30-day limit.[18][19] This led to $40 million in consumer refunds as a result.[20]

References

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  1. ^ "About Us". TracFone Wireless. Retrieved December 27, 2012.
  2. ^ Cohen, Howard (April 8, 2016). "TracFone CEO, Cushman School supporter F.J. Pollak dies at 53". Miami Herald.
  3. ^ Commisso, Marco (May 3, 1999). "Miami company prepares prepaid cell-phone invasion". South Florida Business Journal.
  4. ^ "Miami Company Prepares Prepaid Cell-Phone Invasion". South Florida Business Journal. Retrieved December 18, 2009.
  5. ^ "Walmart Launching Exclusive Straight Talk No-Contract Wireless". CSP Daily News. October 16, 2009. Retrieved July 11, 2024.
  6. ^ "America Movil to Buy Page Plus Cellular Parent Start Wireless Group". PhoneNews.com. May 20, 2013. Retrieved August 9, 2016.
  7. ^ "TracFone's Straight Talk starts BYOD iPhone program". FierceWireless. January 18, 2013.
  8. ^ Fletcher, Bevin (September 14, 2020). "Verizon swoops into prepaid with $6.9B Tracfone acquisition". FierceWireless.
  9. ^ Kelly, Makena (November 22, 2021). "FCC approves $6 billion Verizon-Tracfone acquisition". The Verge. Retrieved November 23, 2021.
  10. ^ "Verizon completes TracFone Wireless, Inc. acquisition (press release)". www.verizon.com. November 23, 2021. Retrieved November 23, 2021.
  11. ^ Alleven, Monica (November 19, 2021). "Verizon's acquisition of TracFone wins CPUC approval | Fierce Network". www.fierce-network.com. Retrieved July 11, 2024.
  12. ^ Furnas, Dawn (November 16, 2022). "Verizon launches new organization to encompass value brands". NJBIZ. Retrieved March 21, 2023.
  13. ^ "Verizon reportedly begins weeding TracFone brands". Light Reading. October 12, 2022. Retrieved July 11, 2024.
  14. ^ "Verizon Migration". m.tracfonewirelessinc.com. Retrieved July 11, 2024.
  15. ^ O’Brien, Kyle (July 11, 2024). "Total by Verizon Rebrands to Total Wireless for Clearer Differentiation". Adweek. Retrieved July 11, 2024.
  16. ^ "News Northern Kentucky | The Enquirer". Cincinnati.com. Retrieved December 27, 2019.
  17. ^ "TracFone Wireless Inc. Roaming Fees Class Action Settlement". Class action news consumers can use. Retrieved February 6, 2011.
  18. ^ Farnham, Alan (July 30, 2013). "Class Action Suit Claims Walmart and TracFone Mislead Phone Customers". ABC News.
  19. ^ Morran, Chris (January 28, 2015). "TracFone To Refund $40 Million To Customers For Deceptive "Unlimited" Data Claims". Consumerist.
  20. ^ Moscaritolo, Angela (January 28, 2015). "TracFone Fined $40M for Throttling 'Unlimited' Data Plans". PCMAG. Retrieved August 29, 2020.
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