Verizon edged closer to sealing a proposed US$6.25 billion acquisition of MVNO Tracfone Wireless after the California Public Utilities Commission (CPUC) approved the deal, as the companies agreed to some additional terms to protect consumers.

The CPUC reviews proposed telecoms mergers to ensure they are in the public interest. In a statement, it explained it gained commitments from Verizon to enhance service quality and benefits for impacted customers, including those participating in a phone service subsidy programme.

Verizon or Tracfone must participate in California Lifeline for 20 years after the deal is closed; sign-up at least 200,000 subscribers to the programme by 31 December 2025; and offer users devices including 5G phones at no extra cost after a year of operation.

The CPUC also imposed requirements on tariffs and advertising based on the programme.

It mandated a smooth migration of Tracfone customers to Verizon’s network within two years of the deal closing and detailed plans to establish a reporting process to ensure compliance, with penalties if specific requirements are not met.

CPUC commissioner Clifford Rechtschaffen said its decision imposed conditions “to ensure that low-income customers in particular benefit from this merger”.

Verizon’s move for Tracfone faced opposition from trade union Communications Workers of America (CWA), among others, but the operator worked to overcome their objections.

The acquisition gained US Department of Justice clearance, but Federal Communications Commission approval remains outstanding.