For the TracFone by KVH Industries, see that company's article.

TracFone Wireless or TracFone is a mobile phone provider, subsidiary of América Móvil the largest Latin American mobile network operator; that provides prepaid mobile phone service in the United States, Puerto Rico and the United States Virgin Islands. TracFone is currently the sixth-largest mobile network operator and the largest mobile virtual network operator in the U.S. market with 10.108 million customers (as of June 2008).

History

TracFone was established in 1996 as Topp Telecom Inc., a prepaid cell phone company, in Miami, Florida. In February 1999, Topp received a major infusion of capital from Telefonos de Mexico or Telmex (NYSE: TMX), Mexico's largest telephone company. TelMex paid $57.5 million for a 55 percent controlling interest in the company.

In 2000, Telmex spun off their mobile unit, creating América Móvil, of which Topp Telecom became a subsidiary. In November 2000, Topp Telecom Inc. changed its name to TracFone Wireless Inc. The company has since grown into the prepaid leader of the United States.

Service

TracFone provides two brands of service: TracFone and Net10. The main difference is the logo and the prepaid minute rates and service options. Currently Net10 only offers GSM & CDMA services.

TracFone

The service allows a customer to buy airtime units to use on selected phones by Nokia, LG, Motorola, pursuant to a licensing agreement. TracFone sells digital cell phone models, although analog phones were once available. Depending on the region, TracFone service works on a GSM or a cdmaOne network. TracFone does not build its own wireless network but "resells" wireless service from more than 30 providers, as a mobile virtual network operator (MVNO). In the United States, TracFone operates on the AT&T, Verizon Wireless, Sprint, Claro and T-Mobile networks, among others (such as Alltel and US Cellular).

Since the last quarter of 2006, Tracfone had been upgrading the Analog and TDMA technology in order to only provide digital technology across the United States. TracFone was due to complete the transition by February 18, 2008 when AT&T shuts down its TDMA service. Most of the customers are migrating into CDMA or GSM technology according to the local area where the customer would be using the phone the most.

TracFone requires the customer to activate a cell phone before use. Activation consists of calling the TracFone hotline number or going to the TracFone website and entering programming codes directly into the phone or by using the OTA feature (through radio waves provided by the customer's local tower). The customer redeems units by entering a validation code into the phone or by using the OTA feature (Over the Air) on the prepaid menu, also known as the Redeem Airtime option. A single unit roughly equates to one minute of telephone airtime. Receiving SMS text messages is free on the Nokia 1100, 2600, and 3390 models and the Motorola V170 and C155 models but costs 0.3 units on the Motorola C139, C261, V176, and W370 models to open the received message. Sending SMS text messages typically cost 0.3 units on GSM models (0.3 units per page, where some models like the Nokia 1100 transmit only the first page while others like the Motorola W370 transmit multiple pages but charge more than 0.3 units per message). Sending or receiving SMS text messages costs 0.5 units on TDMA and CDMA models. Certain older TracFone models also may implement a roaming charge, which charges 2 units per minute of conversation outside the caller's home region; most newer models no longer charge roaming.