Two of the top twenty LifeLine Assistance free government cell phone companies have now dropped out of the business. We’re not saying they cut back. We’re not saying they lost market share. We’re saying they packed their bags, closed up shop, and walked away from the entire business. And two others have merged into a single company.
When we last updated our list of leading Lifeline Assistance companies, ReachOut Wireless ranked number five, Care Wireless ranked number twelve, and number ten YourTel has merged with number eight TerraCom.
First, let’s review those three companies and then we’ll get into some of the reasons they may have exited the business.
Care Wireless is now Care lifeless
We were first alerted to the fact that Care Wireless was dropping out of the Lifeline Assistance business by a reader who sent us the following email on January 14, 2016:
“Got a text from Care Wireless today. They are shutting down as of January 31st 2016. Called and verified.” The company’s message to their customer also said, “Please contact the Care Wireless at 855-711-2222 for further information.”
We considered this potentially huge news, because according to our 2014 ranking of the top Lifeline Assistance companies, Care Wireless ranked #12 with approximately 91,000 customers in Illinois.
So we did what any self-respecting investigative reporter would do — we checked the company’s website and Facebook pages. Both efforts seem to confirm the reader’s email, because Care has not updated its Facebook page since December 7, 2015. And it’s website, CareWireless.com, is no longer up and running.
Do you need more evidence that the company is kaput? We contacted Care’s Customer Support to ask if it is, in fact, true that the company is dropping out of the Lifeline Wireless business. Here’s the response we received:
Unfortunately, yes. Care Wireless service will be discontinued on January 31st for all of our customers. We do apologize for any inconvenience this may have caused for you. However, please feel free to contact one of the other lifeline providers listed below.
Safelink Wireless (800-723-3546) www.SafelinkWireless.com
Life Wireless (888-543-3620) www.lifewireless.com
American Assistance (866-966-2628) www.americanassistance.com
Access Wireless (800-900-5899) www.accesswireless.com
YourTel Wireless (877-716-8880) www.yourtelwireless.com
We must give Care credit where credit is due for doing everything they could do to help their customers by listing the alternate Lifeline companies and giving complete contact information.
You’re a class act, Care and we’re sorry you will no longer be around to help America’s neediest citizens.
ReachOut Wireless has flamed out
Although ReachOut had become a shadow of its former self, it was still one of the ten largest Lifeline Assistance free government cell phone providers. According to our 2014 rankings, it was #5 and served nearly 700,000 customers in 30 states — Alabama, Arkansas, Arizona, California, Colorado, Georgia, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Michigan, Minnesota, Mississippi, Missouri, Nevada, New Jersey, North Dakota, Ohio, Oklahoma, Pennsylvania, Rhode Island, Texas, Virginia, West Virginia and Wisconsin.
As we reported in an article titled, “The spectacular rise and fall of ReachOut Wireless,” the company was like a thoroughbred racehorse that broke a leg rounding the final turn. Euphemistically speaking, medics rush out onto the track and put the poor, suffering horse out of its misery.
What the hell happened to ReachOut Wireless? The company, which we once ranked as the third largest free government cell phone company, has seen its Lifeline Assistance income plummet in the last three years and, according to our sources and contacts from several of our readers, it is no longer enrolling new customers in the Lifeline cell phone program.
As we’ve noted several times in the last few months, the free government cell phone sections (“Lifeline” sections) of the company’s website have been “Under construction” for months now. If you attempt to go to one of those pages, here’s what you see:
Much to our delight, ReachOut finally did the right thing. As has been reported many times in our readers’ comments, ReachOut texted all its customers to announce the dates that it was ceasing service in each of the states it served. Its website also provided a state-by-state list of alternate service providers for its customers.
Perhaps the company would still be prospering if it had provided its customers with such excellent service for the last few years.
YourTel merges with Terracom
The merger of YourTel and Terracom is the least surprising development on this list. The two companies shared substantially identical ownership and management. their respective websites were virtually identical except for the names of the companies. And the only difference in the service was the states in which they did business.
So it comes as no surprise that they have finally ended the duplication of efforts and merged into one company.
Smaller companies also dropping out
The three companies mentioned above are far from being the only changes in the Lifeline Assistance free government cell phone business. Here’s a quick summary of other changes we’ve noted in the last year:
- Alaska Communications – Is no longer offering free government cell phones in Alaska
- AmeriMex Wireless has changed its name to SafetyNet Wireless
- Link-Up Telecom – no longer in business
- nTelos Wireless – no longer offering Lifeline services
- SureLink has changed its name to TruConnect
- Conexion Wireless – no longer business
Which free government cell phone company will be next?
The free government cell phone program is under assault and we would not be at all surprised if additional companies go out of business in the not-to-distant future. If we had a crystal ball that could predict which companies will prosper and which will fail, we would take it to Wall Street and become richer than Warren Buffett.
Lacking that crystal ball, we are still able to make some reasonable guesses about the future.
The Federal Communications Commission is ruthlessly going after fraud, waste and abuse, and as a result, government subsidies have been slashed by billions of dollars in the last two years. In other words, there is less money to go around and that will undoubtedly force smaller, less profitable service providers out of the business.
In addition, more than 40 new service providers are awaiting FCC approval of their Lifeline Assistance applications. So an already fierce competitive situation is set to become even more fierce. Weaker companies may not survive.
But while competition may be bad for weaker free government cell phone companies, it is excellent for their customers. More competition will force the surviving companies to offer their customers more services and better service. The fight for customer acquisition will result in a better customer experience.
In the long run, this may be bad news for the companies that ultimately fail, but it is all good news for you, the free government cell phone customer.