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Tracfone grows Q3 Revenues

October 28, 2016


America Movil’s U.S. MVNO, TracFone, reported rising revenues and subscriber numbers in the third quarter, mostly due to the 1.2 million prepaid customers the Mexican telecommunications company purchased from T-Mobile in August.


Earlier this month, T-Mobile confirmed its sale of its Walmart Family Mobile business to TracFone. The move gave TracFone – which is the U.S. MVNO business of Carlos Slim’s massive telecommunications conglomerate – a major presence in the world’s largest retailer.


Terms of the deal were not disclosed, though Wave7 Research estimated earlier this month that TracFone received roughly 1.4 million U.S. prepaid customers through the deal.


Today, in its quarterly earnings report, America Movil confirmed the transaction along with the number of customers included in the deal: “In the third quarter we acquired 1.2 million subscribers from T-Mobile’s WalMart Family Mobile and finished September with 26.5 million clients, 3.0% more than a year before,” America Movil wrote in its earnings release.


TracFone is the largest MVNO in the U.S., selling phones on every major U.S. network, and it operates nearly a dozen U.S. prepaid brands including Net10 Wireless, Straight Talk and SafeLink Wireless, which provides services through the federally funded Universal Service Fund.


TracFone grew its U.S. subscriber base from 25.3 million in the previous quarter to 26.5 million in the third quarter. The company added that its revenues during the period totaled $1.9 billion, up 9.7 percent from the prior year’s quarter. “In absence of the [WalMart Family Mobile] acquisition, our revenues would have grown 6.8% in annual terms and the EBITA expansion would have been 37.2%,” the company wrote.


TracFone’s ARPU reached $22 during the quarter, an increase from the prior year’s quarter, and its churn rose to 4.3 percent.


Interestingly, TracFone also appears to be ramping up its advertising in the U.S. market. According to a recent report from ad-tracking company iSpot, TracFone’s Straight Talk Wireless accounted for 6.8 percent of the wireless industry’s total adverting spend in the United States in September. Though only running three ads 1,180 times, the brand still managed to spend an estimated $12.7 million during the period.


Walmart Family Mobile is TracFone’s third major acquisition in the U.S. in recent years. In 2013, TracFone acquired Start Wireless' Page Plus Cellular, an MVNO that counted around 1.4 million customers in the United States and was primarily using Verizon’s network. A year before that, TracFone purchased T-Mobile’s MVNO Simple Mobile and its 1 million customers.


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