TracFone’s “SmartSIM” Could Be An Industry Game-Changer, But It Will Depend On Its Implementation

Tracfone may be readying the launch of a new service titled "SmartSIM."  FierceWireless, recently detailed what is known about the new product in an article.  In short, it will likely be a SIM card based service that will allow subscribers to automatically connect to and use whatever major big 4 carrier network is giving them the best coverage at any given moment in time.  SmartSIM hasn't officially launched yet and right now seems to be in some sort of trial and marketing phase.  Since the FierceWireless article came out, the website for the service, located at nodeadzone.com has been turned off and now redirects to Total Wireless.  Domain records indicate that the domain was first registered on 11/4/2019 to Tracfone Wireless, Inc.  A Facebook page had also been set up for SmartSIM but has been deleted.

HowardForums users had first noted the website back in December when one member stated they had received an email from Tracfone about the new service.  Industry analyst Jeff Moore, Principal of Wave7 Research also received the email as did I although it got lost in my inbox until recently.  A copy of the email that was sent out is below.

Before the website was taken down, I had a chance to watch a video detailing how the new service may work.  But it wasn't very clear, and really, not many details were given out about the service.  So that leaves those of us who got to view the website and video with more questions than answers.  Still, depending on how Tracfone implements this new service, it could be a game-changer, both for Tracfone, and consumers.

How Did We Get To SmartSIM?

América Móvil operates several brands under the Tracfone umbrella including Straight Talk Wireless, Total Wireless, and Safelink.  Since 2016 (shown below) América Móvil has been reporting decreases in the total number of Tracfone brand subscribers it has.  Part of those decreases are due to a loss of Safelink subscribers.  But that doesn't account for all of them.  Some of the losses have been offset by growth from one of Tracfone's flagship brands, Straight Talk Wireless.

*= as of quarter 3, 2019, full-year results not out yet at article publication time.

While Tracfone brands as a whole have been losing subscribers, total revenues for América Móvil's Tracfone brands have gone up and ARPUs have increased.  Part of those increases can be attributed to the loss of the lower margin Safelink subscribers, while América Móvil's 2018 annual report says the 2017-2018 increase "reflects higher mobile voice and data usage and revenues driven by the success of existing unlimited data plans, principally those offered under our Straight Talk brand and our recently acquired Walmart Family Mobile brand."

A closer look at América Móvil's annual revenues (depicted below) shows that revenue growth from 2017 on has become relatively stagnant.  The MVNO market place has continued to become more competitive and providers such as Tracfone have had to look for new and alternative revenue sources to help fuel growth.  The Tracfone brands have started to do that.

* = 4th quarter 2016 ARPU
** = full-year 2019 revenue as estimated by BestMVNO based on previous quarters and years

In November of 2019, BestMVNO reported that Tracfone and Simple Mobile had launched a new service called Car Smart.  Car Smart plans are hotspot plans designed for the connected car that will also help subscribers keep an eye on the health of their vehicles by monitoring vehicle diagnostics.  The plans come with a piece of hardware that plugs into the vehicle's on-board diagnostics port which is used to monitor the car's emissions, speed, mileage and other sensors that can track the health of the vehicle.

About a month after Car Smart was announced, Tracfone quietly announced SmartSIM a product that could have more mass appeal and could potentially be a game-changer that could put pressure on the market and help the company reverse its subscriber slide.

Is SmartSIM A Game Changer?

It certainly could be.  But it's going to depend on its implementation.

A video that was posted on nodeadzone but is no longer available, suggested that subscribers will simply need to put a physical SIM card into their device, and then, wherever they travel to, their device will automatically connect to whichever carrier network is providing them with the best coverage at their given location.  Although the video depicted the use of a physical SIM card, FierceWireless and others have speculated that eSIM could also become important here.

Unfortunately, that's pretty much all the information that Tracfone offered about SmartSIM.  I have no idea if there will be monthly phone plans offered, or if the service will be designed for short term limited use for those who go on a trip.  Perhaps the product will, in fact, be aimed at the travel market.  If it's designed for that market niche, it would be less of a game-changer but certainly something to keep an eye on.  Tracfone may also have to give the product a new name.  I'm not sure the name SmartSIM is set in stone, given that there is already a company on the market that sells what it calls SmartSIMs for the travel market.  That company is SmartSIMUSA.

Now if Tracfone is going to offer SmartSIM as monthly service plans similar to Straight Talk, Total Wireless and its other brands, it will be something to behold.  The amount of network coverage that could be offered would be unprecedented in the MVNO market and could perhaps present a challenge to the wireless industry as a whole.

MVNOs typically don't allow roaming, and most can only use one network to provide service to an individual customer.  There are a limited number of exceptions to this which include Google Fi and Twigby.  However, no MVNO on the market currently offers its subscribers the ability to seamlessly use all 4 major wireless networks with their service plan.

While SmartSIM still likely won't be able to match the level of coverage provided by major carrier networks due to all the roaming agreements that major carriers have with regional providers, the way the service gets marketed could still put pressure on the carriers and other MVNOs.

Can you imagine the potential marketing and advertisements that we'll see for SmartSIM?

"Why choose one carrier when you can have all four?"

"SmartSIM, the best coverage from all the best networks."

Coverage on all four networks will probably come at a premium price tag, which could also help América Móvil increase revenues with its Tracfone brands.

Between what the service offers, the revenues it could bring in, and its marketing potential, SmartSIM could be a game-changer, but only if it's done the right way.