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MVNO TracFone Building Retail Stores

CTIA 2013 Las Vegas — No-contract MVNO TracFone Wireless, whose subscriber base rose to 23.2 million at the end of the first quarter, plans to further expand its subscriber base by establishing retail stores that exclusively sell its prepaid brands.

 The Miami-based company is working with master agents to set up retail locations owned and operated by independent parties. The stores go by the name Simple Mobile Solutions.

  TracFone, which owns the store name and provides the store buildout, set up five stores in New York City and five in Miami in the past month. The company plans to launch up to 30 more by year’s end and expand beyond that in 2014, said Tim Garrett, regional senior VP for indirect-channel marketing.

 Stores will be located to fill in gaps between the locations of retailers that sell TracFone-owned brands, Garrett explained. The stores will be located “a reasonable distance” from TracFone’s existing retail accounts in locations where the competition consists of carrier stores, he explained.

 The Simple Mobile Solutions stores will also enable consumers “to see all the brands the way we see them,” provide focused support for TracFone brands, and enable subscribers toi go to a physical location for support instead of calling or emailing customer service, he added.

 The five TracFone brands sold in the stores are TracFone, Telcel America, Simple Mobile, Net 10 and Safe Link Wireless brands. TracFone also offers Straight Talk no-contract service, but it is available exclusively through Walmart.

 Here at the CTIA convention, TracFone built a booth that looks like the interior of one of its stores with displays for each of the five brands.

    The MVNO is the nation’s largest no-contract MVNO and fifth largest cellular-service provider by subscriber base, COO Paul Kozma said.

  And it’s getting bigger. This week, the company entered into an agreement to buy no-contract MVNO Page Plus and its 1.4 million subscribers. About a year ago, TracFone purchased no-contract MVNO Simple Mobile and its more than 1 million subscribers.

 As an MVNO, TracFone itself doesn’t operate a network but resells service from networks operated by the four national carriers.

 In the first quarter, TracFone increased its number of net new subscribers by 127 percent to 839,000, bringing its subscriber base to 23.2 million, up 15.4 percent from the year-ago quarter.

Revenues were up year over year by 39.8 percent to $1.5 billion; the average subscriber’s minutes of use were up 30 percent year over year to 526; average revenue per user rose to $19 from $16, and the churn rate fell to 3.7 percent from a year-ago 3.9 percent.