TracFone has announced the purchase of T-Mobile MVNO Simple Mobile for an undisclosed amount. TracFone is the nation’s largest MVNO with around 20.1 million subscribers.
“The acquisition will add important new distribution channels for América Móvil and is likely the first step in a broadening strategy,” wrote BTIG analyst Walter Piecyk, who estimated that T-Mobile owned 30 percent of Simple Mobile but will not move to block the transaction.
This is just more industry consolidation and as TracFone grows, the more attention Prepaid plans will receive, an area T-Mobile already shows a lot of growth. It will be interesting to see how the Prepaid and Postpaid markets look 5 years from now.
What does all this mean? Nothing much for the near future. However, with economic woes accumulating and no real end in sight, cell service providers face the challenge of keeps subscribers who can afford to pay higher fees or loosing those subscribers to pre-paid or pay as you go providers. An example of a family plan with Sprint is $130ish for two lines of service plus tax, which brings the monthly bill to $160 or so. A similar plan on a pay as you go service is $100 after tax with a savings of $720 a year. It is inevitable pre-pay will gain in popularity until the economy improves.
Sources info: Tmonews
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