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Battle heats up in Lifeline mobile market: Assurance Wireless gaining on Safelink Wireless

Assurance Wireless is growing much more rapidly than the current industry leader Safelink Wireless. The momentum could soon move them into the #1 spot in the government's Lifeline wireless phone program for the poor.

PRLog - May 31, 2011 - When you think of the government's free cell phones for the poor program, what company comes to mind? Probably Safelink Wireless, and for good reason.

Safelink, a subsidiary of prepaid wireless phone company Tracfone, was the first company approved to provide cell phones to the low-income and otherwise needy in the United States under the federal-mandated Lifeline/Link-Up program. They got a huge head start in the business and now account for almost four million of the over six million total free mobile phone recipients.

Safelink undisputed leader, but Assurance is gaining rapidly

(see chart in original story, linked at end)

But the competition is heating up, with Sprint/Nextel's Virgin Mobile's fast growing Assurance Wireless making a move on Safelink Wireless. And behind Assurance is ReachOut Wireless, a Nexus Communications company. Dozens of other smaller companies serve a state here and there, but are too small to warrant our attention at this point.

We've asked each of the big three for their subscriber numbers, but they declined to reveal that information, saying those figures were confidential. Our solution? We scoured through reams of data, and calculated the numbers for ourselves. We begin with the total revenues from the Lifeline program for the month of March 2011.

Lifeline Wireless Phone Revenue for Month of March 2011:

Safelink Wireless:       $32,079,925
Assurance Wireless:   $15,620,447
ReachOut Wireless:      $6,303,750

The government pays each of the three companies for each subscriber, for each month of service. There are three tiers of payments (four if you include a much larger fourth tier for those on Indian land) and it’s difficult to know which tier each of the subscribers fall into.  We will use an average of $8.50 per subscriber across the country and will use this to estimate the number of subscribers for each company as of month ending March 2011.

Lifeline Wireless Phone Company Subscribers, March 2011 (est.):

Safelink Wireless:      3,774,109 subscribers
Assurance Wireless:  1,837,700 subscribers
ReachOut Wireless:      741,618 subscribers

These numbers show Safelink Wireless is the undisputed leader with roughly twice as many subscribers as Assurance Wireless, which in turn has more than twice as many subscribers as ReachOut Wireless.  

The ranking is exactly what we would have predicted, but the important question is how are the three companies trending?

The answer? It's trending in favor of Assurance Wireless in a very big way.

Assurance didn’t get into the free cell phone business until early 2010, so it would be an unfair comparison to calculate growth rates from that point since any jump from zero would show stratospheric numbers. So we've calculated subscriber growth for the last three months of data available: January through March 31, 2011. Assurance Wireless already had about a 1.5 million subscribers at the beginning of the year, so that allows us to do an apples-to-apples comparison of growth rates. And here you go:

Lifeline Wireless Phone Subscriber Growth Rates 1/1/11 - 3/31/11

Assurance Wireless:   23.18%
ReachOut Wireless:    13.66%
Safelink Wireless:         2.47%

As you can clearly see, Safelink Wireless still holds the lead. But the lead is narrowing with Assurance Wireless’ high growth rate. Some states have Safelink as their only choice, and the other two players are working to compete in them. Once in, their growth should accelerate.

There’s yet another clue pointing to Assurance’s rapid growth: Google searches for each of the three competitors. We used what's called the Google Keyword Tool to check the number of "exact match" queries for each company. The numbers are astounding.

Queries for the Lifeline Wireless Phone Companies:

Assurance Wireless:   74,000
ReachOut Wireless:    18,100
Safelink Wireless:         8,000

(Note: For ReachOut Wireless, we added together the results for both "ReachOut Wireless" and "Reach Out Wireless.")

The Google search numbers, plus the documented growth rates, leads us to the conclusion that there may well be some interesting changes on the leaderboard over the coming months.

Story with chart: Assurance Wireless gaining on Safelink

# # #

We are the top authority on the federal government's Lifeline cell phone program, which provides free mobile phones to the poor, primarily through the three top vendors, Safelink Wireless, Assurance Wireless and ReachOutWireless.

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Contact Email:
***@freegovernmentcellphones.net
Source:Free Government Cell Phones
City/Town:Mojave - California - United States
Industry:Wireless, Non-profit, Government
Tags:Wireless, mobile, cell, phone, lifeline, welfare, government
Shortcut:prlog.org/11518685
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