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Safelink and Tracfone Wireless

Updated on March 21, 2012

What is Safelink?

The Tracfone corporation provides a service called Safelink, which implements a US government-supported program to provide free cell phones to low income applicants. The program also includes monthly minutes. No monthly charges or contracts are imposed on the participants. Safelink wireless programs bring much-need wireless access to underserved segments of the market.

A popular segment of the wireless telephone market is prepaid. This type of product requires customers to purchase minutes in advance. Instead of receiving a periodic bill, usually monthly, accounts are primed with a specific amount of calling minutes in order to use the phone. When the minutes run out, the phone cannot be used to make calls, send text messages, or access the Internet. Minutes can be added at any time via credit card or gift card. These programs work well for customers who may be developing a credit rating or who require tight control of phone usage,

Tracfone dominates the prepaid market

The Tracfone corporation inhabits a lofty perch in the prepaid wireless phone market. They boast a subscription base of over 10 million subscribers in the Unites States alone. A 'subscriber' may or may not be actively using the service, given that minutes do get consumed and may also expire if unused for a significant period. Since a prepaid phone has no contract, a subscriber this month may not be a subscriber next month: running the risk of losing control of a specific telephone number may not be sufficient motivation to purchase more minutes.

Customers can add Tracfone minutes by purchasing credit online or visiting any number of retail outlets. A minutes purchase may also extend the life of the service, preventing the phone number from being tossed back into the available pool. Most cell phone users prefer to keep a specific number as long as possible: it's problematic for friends and family to reprogram their address book every month.

According to Wikipedia, which is hardly ever wrong about this sort of thing, about 50 providers worldwide lay claim to over 10 million subscribers. The largest provider, supposedly, is China Mobile with over 500 million subscribers.

This looks like the chair from Men in Black, yes?
This looks like the chair from Men in Black, yes? | Source

What is the Purpose of Tracfone?

Tracfone is dedicated to providing low cost wireless service and hardware to consumers. They believe that access to such is a right. A prepaid program is usually within reach of most potential customers because it carries no hidden charges and no ongoing contracts. Some consumers prefer the capability to fund the service as needed and cut back when necessary: Tracfone understands this market segment. They do not offer contract-based plans.

Phones are a big deal. A low cost phone with few capabilities used to be one of the downsides to prepaid plans. Tracfone provides full-featured phones that don't embarrass when yanked out of Birkin bags. Certainly, a low-cost flip phone can be hooked to a prepaid plan, but so can a Motorola touchscreen unit with web access.

A Subsidiary of América Móvil S.A.B. de C.V.

Tracfone is a subsidiary of a corporation going by the name of América Móvil S.A.B. de C.V. This conglomerate claims over 250 million subscribers scattered over 18 countries in North and South America. They also support land lines, totaling over 28 million. The fact that land lines amount to less than 10% of wireless subscriptions is a telling statistic: the future of phones does not include plugging them into the wall.

América Móvil S.A.B. de C.V. inhabits a listing on many stock exchanges. United States shares can be traded on the NYSE (New York Stock Exchange) through the symbol AMX. At the time of this writing, the average daily volume of the equity was over 8 million shares. By Comparison, AT&T, another leading wireless provider, enjoys an average daily balance of over 22 million shares. Verizon splits the difference at about 13 million shares changing hands each trading day.

Look on the NASDAQ for another listing tied to América Móvil S.A.B. de C.V.: AMOV. This company also appears on the LATIBEX under the symbol , which obviously is the only international trading market for Latin American stocks.

Interestingly enough, phone giant AT&T owns a significant portion of América Móvil S.A.B. de C.V. shares. According to the company web site, AT&T is one of only 3 entities that holds more than 5% of any classification of shares. These shares are ensconced in a Mexican trust, in accordance with Mexican Law. For more information, and a quick headache, look here.

Safelink is free, really

The United States government underwrites free cell phones and services within the Safelink umbrella. Unfortunately, one or more 'helpful' organizations offer to charge a fee to help folks get registered in the program. A helpful warning from the Massachusetts Office of Consumer Affairs points out that an entity calling itself TruLinkWireLess collects a $30 fee for providing guidance. This may or may not be illegal, but it's probably not necessary.


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    • nicomp profile image

      nicomp really 6 years ago from Ohio, USA

      @incomelink1 : I agree!