Sprint, a leading network carrier in US, has confirmed that it will merge with Access Wireless in an effort to come up as the largest provider of Lifeline services throughout the nation. According to reports, the carrier will own 70 percent of its new business, which will operate under the name i-wireless while the remaining 30 percent will be owned by i-wireless. Paul McAleese, i-wireless founder and CEO, will lead the combined business and i-wireless continues to operate on Sprint’s network.

Lifeline service provides discounted service to low-income consumers. It was launched during the Reagan administration and firstly it included landline phones only. However, in 2005, the service expanded to mobile phones also. FCC voted in March to expand the program to cover fixed-line and mobile broadband service; the expansion also included a provision for the creation of a new third-party verification system to prevent the fraud that has long plagued Lifeline.

“This alliance will create a vibrant competitor ready to embrace a modernized Lifeline program,” McAleese said in a press release. “As the category transitions to broadband, we’re enthusiastic about the potential to help customers more fully participate in today’s digital economy by making access to employment, education and healthcare services more affordable to low-income consumers,” he further added.

Owned by Kroger, i-wireless is the nation’s largest supermarket chain by revenue. Also, Sprint said that this merger will enable the new business to leverage its nationwide network and i-wireless’s distribution footprint, which consists largely of Kroger grocery stores. “I-wireless has a unique competitive advantage in its ability to accurately and efficiently qualify new customers for Lifeline services through a relationship with its strategic investor, The Kroger Co.,” according to Sprint’s press release.

Sprint’s Virgin Mobile brand lost about 1.6 million Lifeline customers three years ago when a federally required check found many users no longer qualified to receive the subsidies. AT&T, Verizon and other service providers also lost Lifeline users due to the FCC’s overhaul.