According to foreign media reports, a number of potential buyers revealed that they are preparing to bid for the US wireless carrier Sprint’s prepaid wireless brand Boost Mobile. In exchange for the US government’s approval to merge with another wireless carrier, T-Mobile, Sprint plans to sell the subsidiary for $3 billion.
Last week, T-Mobile and Sprint reached a $26 billion merger and acquisition deal with the approval of the US Federal Communications Commission (FCC), after the two wireless carriers made concessions. This includes the sale of Boost Mobile to reduce the market share of the combined company in the prepaid wireless business. In prepaid wireless services, customers pay for telephone service at the beginning of the month without having to pass a credit check.
Although the deal is awaiting a decision by the US Department of Justice, interested parties are already preparing for the bid. The sale process is expected to begin after the review by the Ministry of Justice.
Prepaid brand Q Link Wireless is also the third largest provider of federal aid wireless plans, said founder and CEO Issa Asad, who is integrating a solution to private With the support of equity, it is boosted, and is willing to pay $1.8 billion to $3 billion for the acquisition of Boost Mobile.
Assad said that the bid price will depend on the quality of Boost Mobile customers, such as their level of loss (or customer withdrawal rate), the equipment they use, and what type of package they use. These related information were not disclosed.
This month, Cowen analysts estimate that Boost Mobile has between 7 million and 8 million customers, and if the deal includes wireless spectrum (ie, radio waves that transmit data) and facilities, its value could reach $4.5 billion. Sprint did not disclose the number of Boost Mobile customers.
Stephen Stokols, chief executive of prepaid wireless company FreedomPop, said he is talking to an undisclosed private equity group that believes Boost Mobile’s future value is about $4 billion.
Although FreedomPop is not a bidder, Stockols said he is advising a private equity group that is preparing to bid. He believes that if the acquisition is successful, the group will merge with FreedomPop and lead him to lead the combined company, which has a wealth of assets.
Boost Mobile founder Peter Adderton also said he is interested in repurchasing the company. In 2004, Adden sold Boost Mobile to Nextel, which was acquired by Sprint. He declined to comment on his own valuation of the company.
Adden said he and his lawyers urge regulators to ask T-Mobile and Sprint to also strip the wireless spectrum to ensure that Boost Mobile is a viable competitor on the market.
Adden added that regulators must also ensure that the new T-Mobile will not use anti-competitive practices to undermine Boost Mobile’s interests, and that the contract between the two companies should be non-exclusive, which will allow Boost Mobile from other The operator purchases a network access service.
When talking about Boost Mobile, Adden also said that the current sales agreement lacks details, but with the correct terms, “we can create a dynamic participant who will compete in the market.”