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As Straight Talk starts selling the iPhone, TracFone sees jump in subscribers, revenue

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TracFone, the country’s largest prepaid virtual operator, managed to outdo its impressive holiday performance in the usually tepid first quarter. It added 839,000 new subscribers to its total, more than the 753,000 it added in the fourth quarter and 127 percent more than its 369,000 net additions in last year’s Q1. TracFone even beat out mobile giant Verizon Wireless(s vz)(s vod), which grew by 720,000 new subscribers last quarter.

Why the big boost? América Móvil(s amex), the Latin America multinational telecom provider that owns TracFone, didn’t give specifics. But it just so happens that in January TracFone started selling the iPhone 5 at Walmart(s wmt) through its Straight Talk brand.

The offer presents a cheap alternative for consumers craving Apple’s latest and greatest device. You still have to pay the unsubsidized iPhone 5 price of $649, but Walmart spreads it out over 26 monthly payments of $25. Meanwhile Straight Talk’s prepaid service comes in at just $45 a month, including unlimited SMS, voice and data, though Straight Talk will start throttling back speeds if you consume much more than 2 GB each month.

That plan is even cheaper than T-Mobile’s new “Un-carrier” $50 tier while also offering more data. The major drawback is that you  don’t get 4G access.  As a mobile virtual network operator (MVNO), TracFone buys network access from the major carriers. The iPhone deal uses either Sprint(s s) or Verizon Wireless’s(s vz)(s vod) CDMA networks, but so far Tracfone hasn’t gotten permission from either to use their LTE services, which can deliver data speeds up ten times faster than their older 3G EV-DO systems.

In its earnings statement (PDF), América Móvil said that its big subscriber gains are coming from Straight Talk and its new brand targeting Mexican nationals Telcel América. Both brands offer more expensive plans than Tracfone’s core prepaid service focused on budget users. Consequently, its average revenue per subscriber jumped 16 percent year over year to $19 a month.

There’s no way to know for certain whether the iPhone is driving those Straight Talk gains unless Tracfone starts releasing device figures. But more of the prepaid operators’ customers seem to be gravitating toward higher-end devices like the iPhone and purchasing more expensive service plans.

10 Responses to “As Straight Talk starts selling the iPhone, TracFone sees jump in subscribers, revenue”

  1. I’m on Straight Talk’s Verizon network, but apparently they got in the same tif that they got into with AT&T. They are no longer offering Verizon to new customers, because verizon pulled their deal (probably because they lost so much business). unfortunately I bought a Samsung with Straight Talk and I HATE IT! I tried to buy a iPhone, but can’t get Verizon on it as they don’t work with them anymore. My Samsung is “granfathered” in, but I can get a new phone. So the choice…
    Pay $90 for 2 phones (Samsung) on ST or pay $150 with contract through Verizon (and that’s NOT unlimited)…ouch! I guess I’m sticking with the Samsung on ST

  2. You forgot Nexus 4 sold at Google Play. A lot of people who bought this phone went to Straight Talk. Considering that you see the total price of the phone even if you pay monthly, I wouldn’t be surprised if Nexus 4 is more popular on Straight Talk than iPhone.

  3. pkdecville

    T-mobile one ups StraghtTalk. ST has no family plan so it’s $45 for each and every phone.

    TM charges a total of $110 for 5 phones; that’s $22 per phone unlimited txt, msgs, and 500MB unthrottled data.

    • Raj Seshadri

      Was just about to say this – thank you.

      T-Mobile’s family plan is incredible.

      1) Each new line gets it’s own data
      2) If one line needs more data, it can add it without messing with the others’ data – $10 for 2GB and $20 to go “unlimited” (throttling at 5GB, I hear).
      3) Tethering is priced-in (even on the 500MB $0 data plan)
      4) $10/mo/line for unlimited international calls to landlines in 50 countries (e.g.: France, India)
      5) They’re really building out their LTE and plans to have many many markets by the end of 2013.
      6) T-mobile is now offering $50 cash card per switching line till 5/31/13:

      As to the $110 for 5 lines, if you want to go to 2GB for each line (ie, 10GB total), it’s only $32/line.

  4. Has any body heard any news about straight talks deal with AT&T I was trying to convert an iphone that I had previously run on AT&T to straight talk via their previously offered AT&T SIM cards but it seems that two weeks prior they stopped offering the SIM cards and were in negotiations with AT&T because AT&T is furious over the loss of so many over priced buckled and dimed customers that felt robbed so they switched to straight talk apparantley AT&T put a stop to that just wondering if they’ve negotiated any deals or if AT&T is still stomping around and throwing a fit about it

    • You can buy and ATT compatible SIM card for your IPhone 5 on Straighttalk on ebay for a premium of around $50 .

      It is still worth it at that premium price in long run.

  5. Philip Courtois

    Straight Talk ALERT: I love the idea of having no contract so I switched to Straight Talk two months ago. Good service first month, but 200MB into second month they throttled me to 120kbps. That’s about 50 TIMES slower than before. When contacting them they said that my data usage was violating their conditions without being able to tell me why. The manager’s solution? To disable any syncing feature or simply turn off phone at night. Completely rubbish!!! I’m switching back to T-Mobile now.