Free Newsletter
Sprint completes Virgin Mobile acquisition
Free newsletter via e-mail
Tools
Sprint Nextel said it completed its $483 million deal to acquire Virgin Mobile USA, a move that will double its bet on prepaid wireless--one of the few growth engines this year in the wireless operator.
The deal had been expected to close in the fourth quarter. Under the transaction, Virgin Mobile shareholders will own around 3 percent of Sprint. Virgin Mobile CEO Dan Schulman will lead Sprint's prepaid business, and will be responsible for the prepaid segment's growth and business strategy. Matt Carter will continue to run Sprint's prepaid Boost Mobile brand and will report to Schulman.
One challenge for Sprint will be juggling the Virgin brand with Boost, which shook up the wireless market earlier this year with the introduction of its $50 monthly unlimited plan. Sprint, which has been losing postpaid subscribers at a steady clip this year, also will have to try and turn around Virgin's business, which has been struggling itself with subscriber losses and high churn rates.
As Sprint integrates Virgin Mobile's operations into its own, the company will be able to use its larger scale and position in the market to exert leverage over phone choices and deals with vendors. However, its chief challenge may be maintaining its strong prepaid business, which has been a crutch in the face of Sprint's continued postpaid subscriber losses.
For more
- see this release
- see this AP article
- see this Dow Jones Newswires article (sub. req.)
Related Articles:
Sprint faced bidding war with unnamed company for Virgin Mobile
FTC approves Sprint-Virgin deal
Class action claims Virgin Mobile undervalued in Sprint deal
Virgin Mobile's profit surges, but subscriber losses continue
Sprint buying Virgin Mobile USA for $483M
Comments
Posted by Anonymous | November 25, 2009 - 1:27am
Given that Sprint did such a bang-up job integrating Nextel several years ago, anyone want to bet that Sprint will f' this one up, too?
Posted by Global Telecom Guy | November 25, 2009 - 2:16pm
Been waiting for this to happen for years!
http://www.gt-t.net
Posted by Figgy | November 25, 2009 - 3:07pm
So Sprint is adding yet another pre-paid wireless unit to its corporate umbrella? They can barely operate the Sprint and Nextel units....
So Sprint, Nextel, Boost Mobile, and now Virgin Mobile not to mention the involvement they have in the Wimax venture and being the network backbone for several cable company VOIP phone service??? wow, I have no words about this company. Sprint has too much going on and they are not very good at any one thing and they continue to add more things by acquiring more business units. You could say they are attempting to consolidate their smaller competitiors but they are still falling behind Verizon and AT&T so whats the point? One could also say they are running neck and neck with T-Mobile and when you are on even footing with T-Mobile, you know something is wrong with your business operations.
Not to mention the fact that they are watering down the brand recognition of the Sprint name by having all these units with different names. Why? they should just absorb all the smaller brands into Sprint or at least leave Sprint as the residential unit, Nextel as the business unit, Boost Mobile and Virgin Mobile should be merged into one brand (with a different name) Sprint has not idea what they are doing...
Comments (4) | Post a comment