Tag: TracFone

Picture representing the concept of a security breach

TracFone Security Breach

Christian

TracFone is experiencing a security incident. Some customer data was compromised, and attackers sometimes managed to port out phone numbers. TracFone put up a webpage with details about the incident:

We were recently made aware of bad actors gaining access to a limited number of customer accounts and, in some cases, fraudulently transferring, or porting out, mobile telephone numbers to other carriers. These bad actors may have had access to your name, address, PIN code, account number, secret question (but not answer) and email address to the extent you provided us with such information.

It sounds like TracFone tried to contact affected customers but may have been unable to in cases where numbers were ported out:

We may have made an attempt to contact you, but given the nature of this activity, messages to impacted mobile telephone numbers may no longer be accessible by some customers.

I’m unsure about the scope of the issue. In a brief search, I couldn’t find any direct reports from affected customers. That may suggest the breach was minor. On the other hand, the incident seems serious since it spurred TracFone to run a banner drawing attention to the incident across TracFoneWirelessInc.com:

Screenshot of a banner drawing attention to TracFone's security incident

I don’t know which TracFone brands are affected. I didn’t see a similar banner on the websites for TotalWireless or StraightTalk.

Hat tip to Dennis Bournique, who drew my attention to this story.

Document getting an approval stamp

Verizon’s Acquisition Of TracFone Gets FCC Approval

Christian 1 Comment

Update: The acquisition is officially complete.

In September of 2020, Verizon announced plans to acquire TracFone and its roughly 20 million subscribers. A while back, the deal was cleared by the FTC and the DOJ declined to hold back the process. The acquisition got its final green lights from the California Public Utilities Commission last Thursday and the FCC yesterday.

I expect the deal to close shortly with Verizon meeting its original goal of closing the deal in the second half of 2021. As expected, the FCC’s approval is conditional on Verizon adhering to some terms. The terms center around consumer protections. Most of the protections relate to the government’s Lifeline program which offers subsidies on phone service for low-income consumers.

Terms of Consumer Protections

Here’s my understanding of the most important and/or interesting terms based on a reading of the FCC’s press release and a skim of the 70-page Memorandum Opinion and Order:

  • For at least seven years, Verizon must continue to offer TracFone’s Lifeline services in the areas they’re currently offered.
  • For at least three years, Verizon must continue to offer existing Lifeline plans that provide service at no cost to consumers.
  • Verizon must maintain some of TracFone’s existing roaming agreements to serve customers in some regions where Verizon does not offer coverage (I think this requirement lasts 3 years).
  • Verizon must offer free devices and/or SIM cards to Lifeline subscribers that are required to transition to Verizon’s network.
  • Verizon must extend its usual (60 day) unlocking policy to acquired customers.
  • For three years, Verizon must extend agreements with MVNOs using its network without altering the terms of the agreements.

As a whole, the terms are less burdensome on Verizon than I’d expected. I previously wondered if Verizon would be required to sell competitors the almost ten million TracFone subscribers who are not currently on Verizon’s network. It looks like no one will force Verizon to do so, and I expect Verizon will transition most of these users to its network.

What Does This Mean For MVNOs?

With Verizon acquiring all of TracFone’s brands and customers, the size of the MVNO market in the U.S. will contract significantly. Further, Verizon may see reduced economic incentives to allow MVNOs to use its network. The FCC acknowledged this concern:1

Verizon, as a result of the transaction, may have an increased incentive to raise the costs of mobile virtual network operators (MVNOs) that compete directly against TracFone for Lifeline and other low-cost prepaid customers and for which Verizon is their wholesale provider…

Commenters argue that, because post-transaction, all significant MVNOs would be vertically integrated with the nationwide facilities-based providers, the vertically integrated MVNOs could coordinate to exclude or otherwise harm competing, standalone MVNOs or adopt parallel strategies to discourage postpaid customers from migrating to lower-cost prepaid plans. Second, commenters claim that coordination would be more likely because the transaction would remove an independently-competing maverick MVNO from the market.

However, it seems the FCC doesn’t take the concern too seriously:

We find that this transaction is unlikely to significantly increase the risk of coordinated effects. Post-transaction, there will remain, in addition to the prepaid brands offered by the three nationwide MNOs, prepaid brands offered by regional MNOs and by numerous independent MVNOs, including Boost and the other MVNOs served by Verizon. These MVNOs will continue to have the incentive and ability to compete for prepaid customers, including cost-conscious customers, which will likely continue to constrain opportunities for coordination on prepaid plans by the three nationwide MNOs. Further, at the wholesale level, contracts between MNOs and MVNOs are complex and specific to the needs of the MVNO that is party to the negotiation, generally last for a period of years, and generally are subject to strict non-disclosure agreements. These features of the wholesale contracts make it difficult for MNOs to coordinate on the terms of wholesale contracts to harm rival stand-alone MVNOs, and the transaction does not affect these features of wholesale contracts except between Verizon and TracFone. Moreover, Verizon’s commitment, which we accept as a condition to our approval, to extend its existing agreements with certain MVNOs for at least three years limits its ability to coordinate to raise wholesale prices.

Here’s what Verizon is ultimately committed to:

Verizon has committed to provide those MVNOs who have current contracts with Verizon an option to extend their existing MVNO wholesale agreements, on the same terms and conditions, continuing on a month-to-month basis until three years after the transaction closes. This option does not apply to MVNOs whose agreements expire beyond three years after the transaction closes.

Reflections

My gut feeling is still that a world where this acquisition goes through will be a world with less competition and higher prices than we’d see in a world without the acquisition. However, I feel less strongly about that than I did a year ago.

eSIM visual

Straight Talk Teases eSIM

Christian

Reddit user u/tronic862016 recently reported Tracfone’s brand Straight Talk is offering eSIMs for some customers using phones in the iPhone 12 and 13 series. The Reddit user shared this screenshot to a post on Reddit’s NoContract community:

Straight Talk screenshot showing an eSIM option

Straight Talk may merely be testing out eSIM rather than going for a full-blown product launch. As far as I can tell, Straight Talk hasn’t made a big fuss about launching eSIM services. Beyond restricting eSIM offerings to recent iPhones, Straight Talk may be further limiting eSIM to certain geographies, plans, or checkout methods. When I briefly ran through Straight Talk’s checkout process this morning, I wasn’t given an eSIM option.

Update: Joe Paonessa let me know that the eSIM option appears on Straight Talk’s activation page (i.e., not during checkout) and doesn’t appear to be restricted to particular geographies or plans.

Green traffic light

Tracfone Acquisition Gets A Green Light

Christian

Earlier this year, Verizon announced plans to acquire Tracfone and its roughly 20 million subscribers. Before an acquisition like this one becomes official, companies have to notify the FTC and DOJ. Here’s how the FTC explains the process:

The Hart-Scott-Rodino Act established the federal premerger notification program, which provides the FTC and the Department of Justice with information about large mergers and acquisitions before they occur. The parties to certain proposed transactions must submit premerger notification to the FTC and DOJ. Premerger notification involves completing an HSR Form, also called a ‘Notification and Report Form for Certain Mergers and Acquisitions,’ with information about each company’s business. The parties may not close their deal until the waiting period outlined in the HSR Act has passed, or the government has granted early termination of the waiting period.

It looks like Verizon’s acquisition of Tracfone was granted an early termination of the waiting period:

Screenshot from the FTC's website

Verizon Hints At Plans For Tracfone Subscribers

Christian

Earlier this year, Verizon announced plans to acquire Tracfone and its roughly 20 million subscribers. While more than half of Tracfone’s subscribers already have service that runs over Verizon’s network, it has been unclear what might happen to the 8 to 9 million Tracfone subscribers on other networks.

In an investor event a few days ago, Ronan Dunne, a Verizon executive, hinted at how Verizon might handle those subscribers if the acquisition goes through:

Just for context, about 13 million of their [Tracfone’s] 21 million, 22 million customers ride on the Verizon network today, but there’s 8 million or 9 million thatride on competitor networks. And we have the opportunity to migrate those across to be on to Verizon.

I’m not sure how seriously I should take Dunne’s words. I still think Verizon may sell off Tracfone subscribers on other networks—selling off some subscribers may appease regulators who are reluctant to allow the acquisition.

Verizon Plans To Acquire Tracfone

Christian

This morning, Verizon announced plans to acquire Tracfone. The planned deal will involve an acquisition of the Tracfone brand and a bunch of subsidiary brands like Total Wireless, Straight Talk, and SafeLink.

At the moment, these brands have about 21 million subscribers. The deal is slated to be worth six or seven billion dollars (or about $300 per subscriber):1

The consideration for the transaction will include $3.125 billion in cash and $3.125 billion in Verizon common stock, subject to customary adjustments, at closing. The agreement also includes up to an additional $650 million in future cash consideration related to the achievement of certain performance measures and other commercial arrangements.

Along with the subscribers and brand names, Verizon is acquiring Tracfone’s roughly 850 employees and Tracfone’s retail presence in over 90,000 locations.2 Verizon expects the deal to close in the second half of 2021.

Reflections & open questions

Tracfone and Verizon will need to pass through some regulatory hoops before the deal is official. If the acquisition goes through, it will cause a massive shift in the industry. Tracfone’s user base makes up about 5% of the U.S. wireless market and a major share of the prepaid market.3

At this time, I’m guessing Verizon will continue to operate several Tracfone brands rather than consolidate Tracfone subscribers under the Verizon brand name.4 Years ago, a Verizon executive discussing Verizon’s lackluster number of prepaid subscribers stated the following:5

“Our retail prepaid is above market. We’re really not competitive in that environment for a whole host of reasons and it’s because we have to make sure that we don’t migrate our high-quality postpaid base over to a prepaid product…Quite honestly, we use the Tracfone brand as our prepaid product.

About 13 million of Tracfone’s subscribers already have service running over Verizon’s network.6 I don’t know what will happen to the 8 million subscribers on other networks. I’m guessing Verizon will try to transition most of them to the Verizon network, but Verizon may sell the subscribers to other carriers.

When the merger between Sprint and T-Mobile closed, I wrote:

I continue to think the merger is going to be bad for consumers over the long term.
I’m guessing the merger between Sprint and T-Mobile contributed to the viability of Verizon’s Tracfone acquisition. As with the merger, I’m not optimistic about the effects this new acquisition will have on consumers in the long term.

TracFone Botching eBay Orders

Christian

Earlier this month, I posted about a plan TracFone was offering through its eBay store. For a single payment of $40, customers could get one year of service with 3GB of data, 1200 minutes, and 1200 texts. TracFone was offering coverage over a customer’s choice of either AT&T, Verizon, or T-Mobile’s network. I thought this was an incredible deal for a low-use phone plan, so I decided to place an order.

Multiple listings

TracFone had a few different listings with the $40 per month plan. In one version of the listing, customers could select the network of their choice from a drop-down menu:

In another version of the listing, TracFone was offering customers a product that included three SIM cards (one for each of the available networks). Customers who purchased from this listing could use the SIM card for their preferred network and discard the two unused SIMs.1

Receiving the wrong item

I wasn’t confident which network I wanted to use during my trial, so I ordered from the three-SIM version of the listing. A few days later, I received my order in the mail, but it only included an AT&T-compatible SIM card.

When I looked back at the eBay listing, it suggested the product only included an AT&T-compatible SIM. This left me confused. I wondered whether the listing had changed or if I’d just made a mistake. TracFone’s customer support on eBay assured me the listing hadn’t changed (emphasis mine):

We have read your e-mail today, March 20, 2020 at 3:25 PM EST. This is in regard to your TracFone Prepaid Wireless Smartphone Plan+SIM-1200 Min, 1200 Txt, 3GB Data.

Please be informed that nothing has changed, but we have added several listings of the same item with different options.

However, the listing had changed. Here’s a screenshot from the listing’s revision history:

Looking back at an archived version of the listing, it’s clear TracFone quietly changed what it was offering. Here’s a product image from the time I placed my order:

Here’s an image from the listing today:

Other reports of issues

Around the time I received my SIM card, I learned other customers who purchased the $40 plan were experiencing issues. A Reddit thread and a discussion on HowardForums detailed the problems. Some people experienced the same issue I had. Other people received SIM cards that didn’t have any airtime or data attached to them.

Those who tried to work out issues with TracFone’s customer support often had a hard time. TracFone’s regular support agents aren’t used to dealing with purchases made through eBay. As I experienced, TracFone’s support on eBay isn’t necessarily all that helpful.

That said, people who tried to get a refund right away (rather than sort out issues with TracFone’s support) probably had an alright experience. eBay is generally buyer-friendly. I doubt many refund requests were denied.

eBay feedback

TracFone’s feedback on eBay shows that issues were widespread. While the $40 plan makes up a minority of TracFone’s sales on eBay, almost all of TracFone’s recent, negative feedback is related to the plan.

TracFone's recent, negative feedback scores

I can’t recommend the plan

I gave my AT&T-compatible SIM a try. Fortunately, it had airtime and data attached as it was supposed to. Service was fine in my brief testing. Still, I can’t strongly recommend the plan. And I wanted to. A year of service for about $3 per month is an amazing deal. The combination of mistakes in fulfilling errors and a lack of customer support agents that can solve issues is a deal-breaker.

Tracfone’s $40 Per Year Plan

Christian 2 Comments

Tracfone is offering a super cheap annual plan through its eBay store. For $39.99, customers can get a plan with:

  • 365 days of service
  • 1200 texts
  • 1200 minutes
  • 3GB of data
  • Service over AT&T, Verizon, or T-Mobile’s network

The allotments of data, texts, and minutes last for an entire year and do not renew each month.

It’s awesome to see that the offer is available on AT&T and Verizon’s extensive networks. As I understand it, Tracfone will ship a SIM card for each of the three networks, and subscribers can then choose which network to use.

This is one of the best deals I’ve seen for an extremely low-use plan. Unlike some of the other companies offering ultra-cheap plans, I have a lot of faith in Tracfone. I’ve gone ahead and ordered a plan, and I expect to post an update once I’ve had a chance to trial the service. I don’t know how long this deal will be around for. Tracfone has suggested it’s a limited time offer.

SmartSIM Speculation

Christian
According to new research, the best provider of wireless service in the US might soon be TracFone, a US subsidiary of Mexican telecommunications giant America Movil.

Wait what?

That’s the opening of a recent post by Mike Dano of Light Reading. Dano is referencing a service called SmartSIM that TracFone recently teased. TracFone hasn’t shared many details yet, but it looks like SmartSIM will allow subscribers’ phones to automatically switch between multiple networks based on the signal strength of each available network.

Dano references a simulation conducted by the network analysis firm Tutela. The simulation suggested TracFone’s SmartSIM service might outperform each of the major U.S. networks. Not many details are shared about the methodology behind the simulation. To Dano’s credit, he acknowledges the simulation shouldn’t be taken too seriously:

Again, SmartSIM today remains only a possibility rather than a concrete offering, and so drawing any firm conclusions about the service at this point is more of an exercise in mental gymnastics than actual forecasting. But, considering many of the pieces are falling into place for a service like SmartSIM from TracFone or someone else, it’s worth giving the topic some thought.

I’m guessing Tutela made several assumptions in its simulation:

  • SmartSIM can access all four major U.S. networks
  • SmartSIM subscribers are not subject to any severe, adverse throttling or prioritization on any network
  • The technology can reliably determine the quality of each available network
  • Network switching will be determined on the basis of service quality alone (irrespective of TracFone’s financial incentives)

Some of these assumptions are probably inaccurate. In particular, I don’t think TracFone will have an easy time working with all four of the major network operators. While TracFone currently offers service over each network, new legal arrangements and technical capabilities will need to be sorted out with network operators before SmartSIM-style network switching is possible. I don’t think Verizon or AT&T will agree to arrangements that allow TracFone to offer better service than their own networks can provide.

Despite my skepticism, I’m still excited about the potential of dynamic network switching, eSIM technology, and SmartSIM-like services.

SIM Cards

TracFone Teases SmartSIM

Christian

TracFone, the company behind several large MVNOs, appears to be working on a new product called SmartSIM. Apparently, some TracFone customers recently received a marketing email that mentioned SmartSIM.1 I was briefly able to access NoDeadZone.com, a website that shared some basic information about SmartSIM. Oddly, the website now automatically redirects to locations.totalwireless.com (Total Wireless is a brand owned by TracFone).

While NoDeadZone.com was accessible, it offered a short video explaining SmartSIM. Apparently, the technology will allow subscribers to switch rapidly between multiple networks based on which network offers the best signal. There’s been some speculation about how up-and-coming eSim technology may enable more people to take advantage of dynamic network switching of this sort. However, the video I gave me the impression that SmartSIM would involve a conventional, removable SIM card rather than an eSIM. At the moment, I’m unsure if TracFone is licensing switching technology Google Fi built, introducing new technology, or something else.

NoDeadZones.com allowed visitors to enter their zip codes to see if SmartSIM was available where they lived. I tried several zip codes, and all were ineligible. It seems that other people had the same experience. I’m not sure whether any zip codes were really eligible for the service.

So far, I haven’t heard of TracFone responding to any requests for more information about SmartSIM. I’m curious about the lack of communication along with the decision to redirect NoDeadZone.com to the main Total Wireless site. It’s enough to make me wonder whether a mistake was made that led SmartSIM to become public knowledge before TracFone intended.

I’ll be keeping close tabs on how the story develops. Dynamic network switching has the potential to improve wireless service and change how it’s priced. With switching technology, it may be possible to charge different rates to different subscribers based on factors like a subscriber’s location, the extent of network congestion, or the quality of service a subscriber receives. Dynamic pricing could potentially lead to far more efficient network usage than conventional pricing—which might ultimately lead to a decrease in how much consumers pay for wireless service.