New York’s Verizon to purchase prepaid phone seller Tracfone for up to $6.9 billion

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New York’s Verizon to purchase prepaid phone seller Tracfone for up to $6.9 billion

Verizon Wireless, the New York-headquartered largest wireless carrier in the United States, said on Monday that the No. 1 US telecom company had been gearing up a buyout bid of as much as $6.9 billion for a Miami-based prepaid, no-contract mobile phone provider TracFone Wireless Inc.

which happens to be a subsidiary of America Movil, Mexico’s No. 1 telecommunication company. In point of fact, Tracfone, the subsidiary of Mexican telecom industry tycoon American Movil, has been the largest mobile reseller in the United States, while in actuality, the prepaid mobile connection provider does not own a network, but pays off wireless carriers likes of Verizon, AT&T and T-Mobile a certain amount in order to use their networks.

Notably, more than two-thirds of Tracfone users in the United States have long been receiving their services through Verizon’s network.

Verizon to continue Lifeline service after takeover

If truth is to be told, a majority of Tracfone clients has been low-income Americans, since a lion-share of the US citizens with a stable financial condition usually prefer “post-paid” connections, while Tracfone has been a key provider of a US Lifeline service that offers discounts in phone calls and internet services for low-income clients.

Verizon had assured late on the day that it had no plans to discontinue Lifeline services.

Apart from that, Verizon had also added on Monday that the $6.9 billion cash-and-stock deal for Tracfone comprises of $3.1 billion in cash and $3.1 billion worth of stocks alongside up to $650 million for American Movil after the sale on the basis of certain business targets set for the Tracfone.

On tops of that, the New York-based America’s largest wireless carrier was also quoted saying at its Monday’s statement that the company was expecting the deal to be closed by the second half of 2021, however, the deal would require anti-trust approvals from the regulators of both Mexico and the US.