VZ - Verizon Is Spending Nearly $7 Billion to Bolster Its Prepaid Business
Just a few months after T-Mobile (NASDAQ: TMUS) closed its acquisition of Sprint to become a more formidable competitor to AT&T and Verizon (NYSE: VZ), Verizon announced on Monday that it is acquiring Tracfone from America Movil (NYSE: AMX). Tracfone is the largest mobile virtual network operator (MVNO) in the U.S. and its subscriber base is heavily skewed toward prepaid customers, helping to diversify Verizon's customer base, which has always predominantly consisted of postpaid subscribers.
The move will bolster Verizon's competitiveness in that market segment against T-Mobile, which dominates the prepaid business.
Verizon's retail footprint is about to get bigger. Image source: Verizon.