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Thread: Tracfone purchase. Is there a breakup fee?

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    Tracfone purchase. Is there a breakup fee?

    Tracfone purchase. Is there a breakup fee?

    There is new talk this purchase may not be approved. If so is Verizon obligated to pay Tracfone a breakup fee? As long as Tracfone is not at fault of course. If so does anyone know the fees costs: money, etc.?
    Last edited by zapjb; 04-20-2021 at 10:48 AM.
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    Quote Originally Posted by zapjb View Post
    Tracfone purchase. Is there a breakup fee?

    There is new talk this purchase may not be approved. If so is Verizon obligated to pay Tracfone a breakup fee? As long as Tracfone is not at fault of course. If so does anyone know the fees costs: money, spectrum etc.?
    tracphone is a MVNO why would they get any spectrum? They don't have their own network.

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    I highly doubt there's that sort of clause in their agreement.

    It's not like Slim really loses much if the deal doesn't go through, but Verizon has more to lose. They wouldn't get the revenue from trac's customers directly or a way to squeeze an MVNO from existence. Verizon would have to get prepaid customers the normal way, by being competitive and actually improving their network.

    Though Verizon having to pay Slim something would be hilarious to find out...

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    Quote Originally Posted by Jack Hagar View Post
    tracphone is a MVNO why would they get any spectrum? They don't have their own network.
    I must have been goofy. LOL. I edited TY.

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    Haven’t seen any reports really of it not passing, it seems the FCC and even the groups that do oppose it just want assurances on the lifeline program.

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    Quote Originally Posted by Theghostlad82 View Post
    Haven’t seen any reports really of it not passing, it seems the FCC and even the groups that do oppose it just want assurances on the lifeline program.
    I don't think it is a sure thing federally with the Biden admin. It would not surprise me if it goes the way that the T-Mo-Sprint did with states getting involved to dip their beaks in the sweet, sweet deep Verizon pockets.

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    Quote Originally Posted by bobdevnul View Post
    I don't think it is a sure thing federally with the Biden admin. It would not surprise me if it goes the way that the T-Mo-Sprint did with states getting involved to dip their beaks in the sweet, sweet deep Verizon pockets.
    Not exactly the same thing. Tracphone isn't even a carrier. Which states are going to be involved? and what reason. Besides the fact Verizon can point that that at&t, T-Mobile and Dish all have prepaid competition and in many states like New York and California both Xfinity and Spectrum also are in the prepaid market

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    Quote Originally Posted by Jack Hagar View Post
    Not exactly the same thing. Tracphone isn't even a carrier. Which states are going to be involved? and what reason. Besides the fact Verizon can point that that at&t, T-Mobile and Dish all have prepaid competition and in many states like New York and California both Xfinity and Spectrum also are in the prepaid market
    It's the idea that Tracfone sells from all three national carriers and has the size/clout to keep wholesale rates reasonable across them, which in turn benefits unaffiliated (non-Cricket/Visible/Metro) MVNOs. Without this, wholesale rates to remaining unaffiliated MVNOs could rise and make for an anticompetitive atmosphere. That is likely something the FTC and FCC are looking at when considering this merger.

    This merger is pretty close to rent-seeking behavior. This is why it is not a good thing and needs to be looked at closely. Rent-seeking behavior tends to be anticompetitive.

    States do have a reason to be involved, maintaing low/no-cost Lifeline services. Some states, ~20 last I recall, provide for additional reimbursement alongside federal funds. Those states would probably like rates to stay reasonable to them and their residents.

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    Tracfone purchase. Is there a breakup fee?

    Quote Originally Posted by bobdevnul View Post
    I don't think it is a sure thing federally with the Biden admin. It would not surprise me if it goes the way that the T-Mo-Sprint did with states getting involved to dip their beaks in the sweet, sweet deep Verizon pockets.
    Except nobody is actually against verizon buying tracfone. Even the groups who are calling for more investigation aren't against them buying tracfone, they just want more assurance that the lifeline program will be kept intact. This is much closer to at&t and leap wireless (cricket) than tmobile sprint(though leap came with spectrum assets). At&t and leap passed, under the Obama admin, but there were concerns on low cost unlimited plans. AT&T had to promise to keep a low cost (was something like $40 or $50 can’t remember the specific promise) for a certain period of time (again don’t remember the specifics of the deal, but believe it was like 12 or 24 months). This will also pass, with Verizon likely having to concede and finally make assurances on the lifeline program. The FCC is just looking for Verizon to say more than “we have no plans to end it”.

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    Quote Originally Posted by zapjb View Post
    There is new talk this purchase may not be approved. If so is Verizon obligated to pay Tracfone a breakup fee? As long as Tracfone is not at fault of course. If so does anyone know the fees costs: money, etc.?
    Wasn't there something like this, when AT&T wanted to buy T-Mobile? So, while not applicable in this case, its a reasonable question to ask.

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    Quote Originally Posted by WaltA View Post
    Wasn't there something like this, when AT&T wanted to buy T-Mobile? So, while not applicable in this case, its a reasonable question to ask.
    Tracpphone is a MVNO not a carrier, HUGE difference

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