Verizon announced its intention to acquire America Movil's US Tracfone property which includes not only the Tracfone brand but also nine other prepaid brands. The Tracfone property brings ~21M subscribers, 90K distribution doors and 850 employees.
The transaction will include $3.125 billion in cash and $3.125 billion in Verizon common stock and also includes up to an additional $650 million in future cash consideration related to the achievement of certain performance measures and other commercial arrangements. Expected deal close is 2H21.
Why It Matters
The old Verizon of old is gone in which it eschewed or minimized its prepaid operations for the chase of higher ARPU bearing postpaid users. Surprisingly after 10 quarters of net prepaid losses, 2Q20 showed a positive net adds.
- AT&T (~18M)
- T-Mobile (~11+M)
- DISH (~9M)