MVNO #1: Tracfone

Tracfone, a subsidiary of América Movil, is the largest provider of prepaid wireless service.  With a current estimate of 3 million subscribers, it is far ahead of its competitors.  Established under the name Topp Telecom in May 1996, Tracfone got a huge head start in the prepaid industry.  However, it wasn’t until after its takeover by América M?vil in 2000 that they reached one million subscribers.  Tracfone offers a phone in the box package with a pay-as-you-go feature to add minutes to your plan. 

Tracfone Wireless' customer base includes the fiscally challenged, senior citizens, casual cell phone users, safety users, parents, the youth market and just about anybody else.  Currently Tracfone phones are available at over 60,000 retailers nationwide.  Eckerd Drug, K-mart, Lowes, Office Depot, Staples, Target, Safeway Western Union, 7-Eleven and many others are currently offering either phones or refill cards.

Tracfone offers a simple nationwide plan with no strings or features to inflate the price.  There is no application downloads and no provided means of attaining downloads for the phones.  Currently, they have six available phones from Nokia and Motorola.  The phones are capable of text messaging, and come with free caller ID, free voicemail and free call waiting.  Phone specifications can be found below: 

Tracfone undoubtedly has the larges subscriber base out of all the prepaid wireless providers at 3 million.However, they are currently not the fastest growing, falling short to both Boost and Virgin.  They do not have any major advertising campaigns like the other two and do not offer any special features, which is their competitors’ creed.  Customer growth is plotted against time below.

I do not foresee Tracfone doing well in the market unless they spice up their program a little.  Their current customers will probably switch to another phone that offers cheaper service or features that they are interested in.  Especially with the new AT&T provider entering the market, rates are bound to drop significantly.  I would not buy this phone because it is not special in any sort of way and the offered phones are not cool.