After a few days of speculation regarding who would be powering StraightTalk’s iPhone models rolling out online and through 2200 Walmart locations today, multiple clues and reports from early purchases have confirmed that TracFone has reached an agreement with Verizon Wireless to power its iPhone lineup on the Walmart-backed virtual operator, rather than rely on its agreements with T-Mobile, AT&T and Sprint to source the devices and provide network access.
This means that both the 8GB iPhone 4 and the 16GB iPhone 5 will access Verizon’s Native Prepaid network for voice and data coverage, while they will be limited to EVDO data access. Additionally, like the iPhone 5 sold on Verizon Wireless, the phone is being sold with an unlocked SIM slot that will allow for using GSM service as a backup abroad, though once activated on StraightTalk, the phone will default to CDMA service and will need to be manually toggled for international use.
As the iPhone 5 features an unlocked SIM slot and is the result of Verizon’s FCC mandate that requires its LTE equipped devices to be sold unlocked, the fact that Straight Talk went with Verizon Wireless for iPhone sourcing and network support may have been a deliberately shrewd move on the part of TracFone in order to draw the most potential customers in terms of service availability and overall appeal, as many current and potential StraightTalk users desire service on Verizon’s network due to its larger coverage area compared to the additional options available on the virtual operator with AT&T, T-Mobile and Sprint.
In addition, while Walmart and Straight Talk are offering special financing options for the 8GB iPhone 4 and 16GB iPhone 5, Walmart and Straight Talk are also offering additional iPhone models for those looking for alternative models with increased storage or newer models from the iPhone 4, as seen in the screen shot below taken from the Walmart sub site for the offering, with a total of 10 models being offered, at least online:
Now that 10 current and past iPhone models are actively being offered on Straight Talk and powered by Verizon Wireless, TracFone and America Movil have laid down the gauntlet against the rest of the industry in terms of offering the lowest cost monthly service plan for the iPhone without the need for an increasingly expensive service agreement or prepaid plans which feature either unlimited data with limited voice buckets or unlimited voice/messaging data access with pricing equal to postpaid rates after taxes, as in T-Mobile’s case with its new $70 prepaid plan with unlimited data.
The biggest question that remains now is what the monthly data allowance for the iPhone will be, as Verizon’s own data offerings for the phone are no longer unlimited and its own comparable iPhone friendly prepaid plan only offers 2GB of data access a month.
If StraightTalk managed to score a higher data allowance for its iPhone selection in comparison to the carrier itself, not only does this make the offering even more compelling, it positions the operator in an even more advantageous position, provided it ever decides to reveal what those data limits are, as it is equally well known for being quiet about such limitations.
However, the fine print may offer more clues as it explicitly forbids tethering the phone alongside the usual Terms of Service for StraightTalk, suggesting that it may have an even higher data limit than the virtual provider’s current Verizon-powered Android smartphones. What remains to be seen now is if TracFone’s expensive gamble on the iPhone pays off, as it seeks to grow its subscriber count while remaining competitive with carriers as smartphones continue to drive growth for the entire industry.