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VZ - 3 Reasons Verizon's Tracfone Acquisition Is Brilliant
Verizon Communications Inc.
Verizon(NYSE: VZ) announced on Monday that it plans to acquire relatively small U.S. wireless brand Tracfone from America Movil(NYSE: AMX), for a little over $6 billion worth of cash and stock. But the decision aims the nation's biggest wireless player at a lower-value prepaid market that understandably hasn't seemed like a priority in recent years.
Circumstances are changing, however. While prepaid wireless customers are apt to remain at the lower end of the per-subscriber revenue spectrum, it's a piece of the market that now makes sense to target -- for three overarching reasons.