SurgePays, Inc. (SURG): 5 FORCES Analysis [Nov-2025 Updated]

You're looking at a company that just posted a staggering 292% year-over-year revenue jump to $18.7 million in Q3 2025, and you need to know if this hyper-growth is sustainable now that the Affordable Connectivity Program (ACP) is gone. SurgePays, Inc. (SURG) has successfully pivoted, fully integrating with AT&T as of April 1st to power over 125,000 Lifeline subscribers via Torch Wireless while simultaneously pushing 95,000 on its new LinkUp Mobile prepaid brand, all while onboarding three MVNE wholesale partners. Before we break down the forces shaping this unique wireless and fintech ecosystem, let's map out the competitive terrain-from supplier leverage to the threat of new entrants-to see how this business, which is still targeting $225 million in 2026 revenue, truly stacks up against its market realities.

SurgePays, Inc. (SURG) - Porter's Five Forces: Bargaining power of suppliers

You're looking at the supplier side for SurgePays, Inc. (SURG), and the biggest factor here is the core network access. Honestly, the power dynamic is heavily weighted by the relationship with the underlying carrier.

High reliance on a single major wireless network operator, AT&T.

For a long time, being a reseller meant you were at the mercy of the major Mobile Network Operators (MNOs). SurgePays, Inc. has been working to solidify its position, and the completion of the nationwide launch and full integration with AT&T on April 1, 2025, was a massive step. This transition from a pure reseller model to a direct carrier partner is key; it changes the negotiation leverage, but you still have one primary supplier for the actual network capacity.

Long-term strategic AT&T agreement (completed April 1, 2025) mitigates immediate switching risk.

The ink is dry on the MVNO integration and full network cutover as of April 1, 2025. That agreement, which took significant investment and time-with team focus on this integration since 2022- locks in the immediate risk. Still, any long-term contract with a single provider means you are exposed to their future pricing or service changes, even if the immediate threat is low. The company is now projecting over $200 million in revenue for the twelve months beginning April 1, 2025, based on this stabilized platform.

MVNE platform development reduces dependence on third-party infrastructure for wholesale services.

The move into the Mobile Virtual Network Enabler (MVNE) space is a direct countermeasure to supplier power. By enabling other MVNOs, SurgePays, Inc. is building its own infrastructure layer, which reduces its dependence on other third-party infrastructure providers for its wholesale segment. As of the first quarter of 2025, the MVNE pipeline had 3 MVNOs fully integrated, with 2 more in the onboarding process. This diversification of service offering, where the wholesale platform benefits from minimal incremental cost, is designed to generate high-margin recurring revenue. The goal is to scale this high-margin wholesale platform.

Here's a quick look at the operational scale that underpins these supplier relationships as of late 2025:

Device suppliers have moderate power due to commodity nature and installment payment structures.

When it comes to the physical devices and SIM cards, the power is more balanced, leaning toward moderate for the suppliers. The inventory levels suggest some scale in procurement, but the nature of the product keeps prices competitive. For instance, the company noted having 290,000 SIMs in inventory, with another 250,000 expected shortly after Q1 2025 to meet demand. Plus, their 'Phone in a Box' solution sold out 2,600 units in under 30 days, showing quick inventory turnover for pre-packaged hardware. If the payment terms are structured to favor SurgePays, Inc. (e.g., long payment windows or volume discounts), the supplier's power is definitely tempered, even if the devices themselves are relatively standard commodities.

You should watch the inventory turnover rates against the cash position of $2.5 million as of September 30, 2025; that cash balance dictates how much leverage you have when negotiating payment terms with hardware vendors.

• Network Access: Dominated by the AT&T relationship post-April 1, 2025.
• MVNE Infrastructure: Reduced by internal platform development.
• Wholesale Partners: 3 onboarded, 2 pending as of Q1 2025.
• Device Inventory: 290,000+ SIMs in stock post-Q1 2025.

Finance: draft 13-week cash view by Friday.

SurgePays, Inc. (SURG) - Porter's Five Forces: Bargaining power of customers

You're analyzing the customer side of SurgePays, Inc.'s competitive landscape as of late 2025. For a company serving subprime and underserved consumers, the power held by different customer groups varies significantly based on their service type.

Individual consumers using the prepaid wireless services, specifically LinkUp Mobile, face low switching costs. This is a highly competitive segment where price is a major driver. As of the end of the third quarter of 2025, LinkUp Mobile had surpassed 95,000 recurring active subscribers. Still, the sheer volume of prepaid options means customers can move easily if a better deal appears.

The Lifeline subscribers, served through Torch Wireless, present a different dynamic. These customers are tied to a government-subsidized program, making them highly price-sensitive to the non-subsidized portion of their service, but their connection to the subsidy itself creates a degree of stickiness. In Q3 2025, Torch Wireless had over 125,000 subscribers, contributing $5.6 million in revenue for that quarter alone.

The retail partners represent a crucial customer group, as they are the physical touchpoint for SIM activations and fintech transactions. SurgePays, Inc. leverages its integrated point-of-sale (POS) and fintech ecosystem to gain their commitment. While the current distribution network involves nearly 9,000 stores, the near-term goal is to expand this to 100,000 retail locations operating on the SurgePays platform. The leverage for these partners comes from the recurring transaction revenue generated through the platform.

For the wholesale MVNE (Mobile Virtual Network Enabler) partners, their power is moderate. These are sophisticated buyers demanding competitive infrastructure pricing for the services SurgePays, Inc. provides. As of Q3 2025, the company had onboarded three MVNE partners to its HERO wholesale platform. This segment is high-margin and scalable, meaning the loss of one partner would be more impactful than losing a single retail location, thus granting them some leverage.

Here's a quick look at the scale of these customer segments as reported for the third quarter of 2025:

The overall Q3 2025 Net Revenue for SurgePays, Inc. was $18.7 million.

The bargaining power dynamics can be summarized by the different levels of dependency and switching costs:

• Individual consumers: Low switching costs; high price sensitivity.
• Lifeline subscribers: Tied to government subsidy; moderate switching friction.
• Retail partners: Leverage through integrated POS/fintech ecosystem.
• MVNE wholesale partners: Moderate power; demand competitive infrastructure pricing.

SurgePays, Inc. (SURG) - Porter's Five Forces: Competitive rivalry

You're looking at a market segment-prepaid and subsidized wireless-that is inherently competitive. The rivalry here is definitely high because you are fighting for the same price-sensitive, underserved consumer base. This means larger Mobile Virtual Network Operators (MVNOs) and the budget brands spun off by the major carriers are constantly vying for market share. They have scale, which puts pressure on pricing and marketing spend.

Still, SurgePays, Inc. is showing it can punch above its weight, evidenced by its recent top-line performance. The rapid growth is hard to ignore. For the third quarter ended September 30, 2025, revenue hit $18.7 million, which is a 292% increase year-over-year from the $4.8 million reported in Q3 2024. That's also a 62% sequential jump over Q2 2025. Management is confident enough in this trajectory to reiterate the $225 million revenue guidance for 2026.

Here's a quick look at how the key operational segments contributed to that Q3 2025 performance:

The differentiation SurgePays, Inc. brings is through its proprietary Point-of-Sale (POS) platform. This technology is what gives them access to the underserved retail environment. They are actively working to scale this footprint; for example, their partner HT Hackney services more than 40,000 retail locations. The near-term goal is to expand that to 100,000 retail locations operating on the SurgePays platform. This physical presence helps lock in customers who might otherwise default to a larger, more visible competitor.

Competition isn't just in the wireless airwaves, though. The fintech space presents its own rivalry challenges from established prepaid card providers and money transfer services. SurgePays, Inc. counters this by integrating these services directly into the retail touchpoint via the POS platform. The company's cash reserves stood at $2.5 million as of September 30, 2025, which is a factor when considering the capital intensity required to compete in both the wireless and fintech arenas simultaneously.

The intensity of rivalry is also reflected in the financial results, even with the revenue surge. The company posted an Earnings Per Share (EPS) of -$0.38 for Q3 2025 against a forecast of -$0.12, which is a surprise of -216.67%. This shows that while top-line growth is strong, translating that into bottom-line profitability against aggressive competitors remains a key challenge.

• Torch Wireless subscriber base exceeds 125,000.
• LinkUp Mobile surpassed 95,000 recurring active subscribers.
• Retail distribution goal targets expansion to 100,000 locations.
• Common shares outstanding totaled 20,431,549 as of November 10, 2025.
• Gross loss narrowed to $(2.6) million in Q3 2025.

SurgePays, Inc. (SURG) - Porter's Five Forces: Threat of substitutes

You're assessing the competitive pressure from alternatives to SurgePays, Inc.'s core offerings. The threat of substitutes is real across both the wireless and fintech sides of the business, but the company is actively building unique value layers to counter this.

Traditional wireless carriers and large MVNOs offer direct prepaid plans as a substitute for LinkUp Mobile.

LinkUp Mobile competes directly against established prepaid carriers and larger Mobile Virtual Network Operators (MVNOs) who can often undercut on price or offer broader national coverage immediately. The substitution risk here is that a customer chooses a more recognized brand or a slightly cheaper plan without needing SurgePays, Inc.'s specific retail integration.

Here's a quick look at the competitive positioning as of late 2025:

The data shows LinkUp Mobile is gaining traction, hitting over 95,000 recurring active subscribers by the end of the third quarter of 2025. Still, the substitute threat remains because the core offering-a $30 monthly plan with 12GB of data-is similar to what many competitors offer.

Government-subsidized Lifeline service is a core product, but funding changes create substitution risk.

Torch Wireless, SurgePays, Inc.'s Lifeline-subsidized brand, generates significant, predictable revenue, but the entire segment is subject to government policy risk, which acts as a major substitute threat if funding shifts or if alternative government programs become more attractive.

The context around subsidy programs is critical for this revenue stream:

• The Affordable Connectivity Program (ACP) officially ended on June 1, 2024.
• Torch Wireless revenue reached $5.6 million in Q3 2025, serving over 125,000 subscribers.
• The Lifeline Program is fully funded and was unaffected by the government shutdown mentioned in Q3 2025 earnings calls.
• The 2025 funding year budget for the Lifeline Program is set at $2.9 billion.

While Lifeline is currently stable, the memory of the ACP ending-which previously supported over 23 million households-highlights the substitution risk inherent in relying on government appropriations, even if Lifeline is funded differently through the Universal Service Fund (USF).

Cash and non-integrated POS systems are substitutes for the ClearLine SaaS and digital top-up platform.

For the fintech and digital top-up side, the substitute is the traditional, non-integrated method of payment or service activation. This means a customer paying with cash for a top-up or using a legacy, non-smart POS terminal that doesn't support SurgePays, Inc.'s digital services.

The company is clearly gaining ground against these older methods. Prepaid top-up POS segment revenue grew from approximately $1 million per month to around $5 million per month. This indicates that $4 million in monthly revenue has shifted from cash or non-integrated methods to SurgePays, Inc.'s platform. However, the overall POS fintech network only spans 9,000+ retail locations, suggesting a massive substitution opportunity remains against the hundreds of thousands of non-integrated locations.

New data monetization services (ProgramBenefits.com) reduce substitution risk by creating a unique value layer.

SurgePays, Inc. is actively mitigating substitution risk by layering unique, high-margin data services on top of its existing infrastructure. ProgramBenefits.com, launched on November 13, 2025, is designed to convert benefit-qualified consumers into revenue streams via lead sales and direct subscriber conversions.

This effort leverages a legacy system that previously generated over $50 million in revenue in a different industry. The target market for this data asset is estimated at approximately 138 million adults, representing 57% of U.S. consumers. By creating a direct digital gateway to this underserved demographic, SurgePays, Inc. is building a moat that traditional prepaid carriers or standalone POS providers cannot easily replicate, thus lowering the threat of substitution for its overall ecosystem value.

SurgePays, Inc. (SURG) - Porter's Five Forces: Threat of new entrants

High capital investment is needed to replicate the nationwide retail distribution network of nearly 9,000 locations that SurgePays, Inc. currently utilizes. Replicating this physical footprint, which includes distribution through partners like HT Hackney servicing over 40,000 retail locations, requires substantial upfront cash outlay and time to secure agreements. The Company's near-term goal is to expand this to 100,000 retail locations operating on the SurgePays platform, which sets an even higher bar for any potential new entrant looking to match their reach.

Regulatory hurdles in the Lifeline program create a significant barrier for new subsidized wireless providers. While SurgePays, Inc. has successfully navigated this, achieving over 125,000 subscribers on its Torch Wireless Lifeline brand as of the third quarter of 2025, new entrants face the complexity of obtaining necessary regulatory approvals and establishing faster enrollment processes. SurgePays, Inc. is projecting daily Lifeline activations to reach approximately 3,000 per day by September 2025, demonstrating a level of operational maturity in the subsidized space that newcomers would struggle to match quickly.

The Mobile Virtual Network Enabler (MVNE) wholesale business model actually lowers entry barriers for other Mobile Virtual Network Operators (MVNOs) that choose to use SurgePays, Inc.'s back-end infrastructure. This is a double-edged sword for the threat of entry; while it invites smaller players to use SurgePays, Inc.'s established platform, it also means that a new entrant could potentially bypass building their own core provisioning and billing systems by becoming a customer. SurgePays, Inc. has onboarded three MVNO partners to date, with additional partnerships in progress, indicating the platform is ready for scale with minimal incremental cost for the new entrant.

Proprietary integrated technology, combining telecom and fintech capabilities, creates a difficult-to-replicate competitive moat. This is evident in the deployment of the ClearLine SaaS platform, which transforms retail screens into media hubs, generating high-margin recurring SaaS revenue. Furthermore, the Company's proprietary point-of-sale platform enables SIM activations, top-ups, and digital financial services across its network. The successful, full integration with AT&T's nationwide 4G LTE and 5G network as of April 1, 2025, represents a foundational technological investment that a new competitor would need to replicate or secure similar direct carrier access.

Here's a quick look at the scale SurgePays, Inc. has established, which new entrants must contend with:

The sheer scale of the existing physical and technological infrastructure acts as a major deterrent. If onboarding a new retail partner takes 14+ days, churn risk rises for smaller, less established players.