One of the country's largest national prepaid cell phone carriers is making free phones and 64 minutes of monthly air time available to nearly 400,000 low-income Maryland residents under a new effort it brought to the state this week.
TracFone Wireless Inc., which has 10 million customers nationwide for its prepaid cell phone plans, can offer the free service because it obtains a $10-per-customer subsidy through a federal program whose goal is to improve land-line and wireless phone access, a company spokesman said Wednesday.
So far, the year-old program - which operates under a TracFone affiliate known as Safelink Wireless Inc. - has been offered to low-income residents in 19 states and Washington. People who wish to apply for a free phone and service must first prove that they receive state or federal help, such as energy assistance, food stamps or medical assistance, according to the program guidelines.
"We have based our entire business model [for Safelink] on the $10 subsidy we're able to get in most states to provide this service," said Jose Fuentes, director of government relations for Miami-based TracFone.
Fuentes declined to say how many low-income customers the company has signed up nationally through the program, citing company policy.
The subsidy comes from the Federal Communications Commission's Universal Service Fund, which has supported a program called Lifeline that helps provide for telephone access in under-served areas across the country. In Maryland, TracFone estimates that more than 90,000 residents in Baltimore alone could qualify for the service.
Other telecommunications companies, such as Verizon in Maryland, may offer their low-income customers a Lifeline discount, but they typically must have a wireless phone contract.
Fuentes said that TracFone is the first wireless carrier to offer low-income consumers a free phone and free minutes each month. The phone they're offering to Maryland residents is an LG-300.
Eligible Maryland consumers can apply for the benefit from Safelink Wireless. If approved, a consumer would have access to the phone for 12 months, with 64 free minutes each month and no activation fees. At the end of the year of service, the consumer would have to show proof that he or she remains on public assistance to keep receiving free monthly minutes.
Customers who wish to use more than 64 minutes will be able to buy more air time from TracFone.