The Lifeline Assistance industry continues to shrink and consolidate as Assurance Wireless, the second largest free government cell phone company, just announced a merger with Access Wireless, the third largest company* in the business.
The new, combined entity will be named i-Wireless. It will still lag behind Safelink Wireless, the original and still the largest free government cell phone company.
Let’s get some definitions out of the way in order to make this story easier to comprehend. First, Assurance Wireless is owned by telecom giant Sprint. Access Wireless is owned by i-Wireless.
Although neither company has released any information regarding the number of customers they serve, our analysis of Lifeline subsidies indicates that Sprint’s Assurance Wireless had approximately 2,166,000 customers in December 2015 and i-wireless’ Access Wireless had approximately 845,000 customers. That means the combined entity will have over 3,000,000 customers compared to Safelink’s 4,165,000 customers.
Of course, the merger is subject to review by the Federal Communications Commission and other regulatory approvals, but we expect those approvals to be granted quickly with relatively few delays.
The new i-Wireless will be led by i-wireless Founder and CEO Paul McAleese.
“This alliance will create a vibrant competitor ready to embrace a modernized Lifeline program,” McAleese said. “As the category transitions to broadband, we’re enthusiastic about the potential to help customers more fully participate in today’s digital economy by making access to employment, education and healthcare services more affordable to low-income consumers.”
“Sprint has enjoyed a great relationship with i-wireless for many years,” said Dow Draper, president of prepaid for Sprint said in a press release. “We’re excited to move forward with this strategic partnership, which will result in efficiencies for both companies, including financial synergies, such as acquisition costs, device purchasing scale and working capital flexibility.”
The two companies believe the combination their respective strengths will power the company’s growth.
As the press release states, “i-wireless has a unique competitive advantage in its ability to accurately and efficiently qualify new customers for Lifeline services through a relationship with its strategic investor, The Kroger Co. Kroger is one of the nation’s largest grocery chains. i-wireless will continue to operate on the Sprint network, which delivers consistent reliability, capacity and speed that customers can count on.”
This merger is just the latest in a wave of changes in the Lifeline Assistance free government cell phone industry.
ReachOut Wireless, which we once ranked as the fifth largest Lifeline Assistance company, dropped out of the free government cell phone business, as did number twelve Care Wireless, and number fourteen Alaska Communications. Two other companies, number eleven Terracom Wireless and number fifteen YourTel Wireless, announced a merger earlier this year. And we expect number nine Total Call Mobile to drop out of the top ten Lifeline Assistance providers after being hit with massive fines by the Federal Communications Commission earlier this year.
* In its press release announcing the merger, Sprint refers to Access Wireless as the “fifth-largest provider” of wireless Lifeline services. However, our analysis of Lifeline subsidies leads us to believe that rapidly-growing Access Wireless ended 2015 as the third largest competitor.