The USA wireless market has always been filled with mergers, acquisitions, and strategic partnerships (think roaming agreements). It’s not uncommon for major wireless carriers to buy smaller carriers and MVNOs to expand their market reach and enhance their offerings. Straight Talk Wireless experienced such a transaction.
In September 2020, Verizon agreed in principal to acquire Straight Talk and all other Tracfone brands that were owned by Carlos Slim, founder of América Móvil. The deal involved $3.125 billion in cash, an equal amount in Verizon common stock, and potential future considerations of up to $650 million, contingent on specific performance targets.
On November 23, 2021, Verizon formally announced that it had finalized the acquisition, making Straight Talk and its Tracfone siblings a part of Verizon’s portfolio. Notably, just a month prior to the deal’s closure, América Móvil disclosed that Straight Talk had 9.5 million subscribers.
Straight Talk was launched in 2009 as a collaboration between TracFone Wireless and Walmart. The brand was exclusively sold in Walmart stores which helped give it significant visibility and traction in the prepaid market. Now under Verizon’s ownership, Walmart continues as the brand’s sole retail partner.
Why Did Verizon Buy Straight Talk?
Verizon’s decision to buy Straight Talk stemmed from its lagging position in the prepaid sector. When the deal was struck, Verizon’s prepaid customer base stood at a mere 4 million, dwarfed by T-Mobile’s 20.6 million and AT&T’s 18 million.
By bringing Straight Talk and all other Tracfone brands under the fold, Verizon was able to add an additional 21 million prepaid customers taking it from industry laggard in subscriber counts to industry leader. Since Verizon’s takeover, churn has reduced the total Tracfone brand subscriber count to 19 million.
When Verizon bought Straight Talk, it didn’t just pick up subscribers, it picked up a significant distribution network. Tracfone brands were and continue to be sold in 3,000 Walmart stores and 90,000 retail locations nationwide that include stores such as Dollar General and Family Dollar.
Straight Talk Changes Under Verizon Ownership
Since buying Straight Talk, Verizon’s changes to the brand have been mostly positive for consumers. One of the first moves Verizon made to Straight Talk was to change its $45 plan from 25GB of high-speed data to unlimited data.
Prior to Verizon’s ownership, Straight Talk’s plans labeled “unlimited” weren’t truly unlimited. Customers that went over a certain amount of data in billing cycle could have their data turned off. But now their unlimited data plans are all truly unlimited.
The Straight Talk brand can also now offer free phones to its users. Although the amount of free phone offerings available is limited, it’s not something that Straight Talk had before Verizon bought them.
One of the most recent changes under Verizon ownership is that Straight Talk now offers a free Walmart+ membership on its $55/month and $65/month flagship unlimited plans.
Straight Talk has always invested in TV and radio advertising. But Verizon has empowered the brand to have its first true celebrity spokesperson. If you have listened to the radio or watched TV with ads you’ve likely come across an ad like the one below that features Jim Gaffigan.
Prior to the Verizon takeover, Straight Talk did feature the voice of a celebrity in their ads but they were never seen on screen. Ed O’Neil was for several years featured as the voice in “It’s time for some Straight Talk” TV ads like the one below.