California approves Verizon deal to acquire TracFone Wireless

Reuters reports that Verizon Communications’ more than $6 billion proposed acquisition of TracFone Wireless has been approved by California’s Public Utilities Commission.

The companies have agreed to some additional consumer protection conditions, the report added.

Under the agreement with the California regulator, TracFone or Verizon must participate in a U.S. program providing subsidized wireless service for low-income consumers for 20 years.

Verizon said in September 2020 it would buy pre-paid mobile phones provider TracFone, a unit of Mexican telecom company America Movil, in a cash and stock deal worth up to $6.9 billion.

The deal was previously approved by the Justice Department and is awaiting approval by the Federal Communications Commission, which has been reviewing the deal.

TracFone is one of the largest providers of telecommunications services under the government subsidy program known as Lifeline with around 1.7 million low-income subscribers in 43 states and the District of Columbia.

Under the agreement with California, TracFone must enroll at least 200,000 Lifeline subscribers in the state by the end of 2025. TracFone or Verizon must offer Lifeline customers a phone at no cost, including 5G phones after the first year of the merger.

TracFone or Verizon must offer plans with comparable voice, text, and data at the same or lower price as TracFone currently offers for five years.

TracFone serves about 21 million customers. Verizon is the largest U.S. wireless carrier by subscribers.


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