Sprint closing in on acquisition of Kroger's i-wireless

Sprint is reportedly closing in on its deal to take a majority stake in Kroger’s i-wireless in a tie-up of Lifeline service providers.

Cincinnati.com said the nation’s fourth-largest mobile network operator “is in the final stages of regulatory review” to buy 70 percent of the MVNO, which is headquartered in Kentucky and uses Sprint’s network to provide nationwide coverage. The grocery chain would retain a 15 percent stake in the company, as would Genie Global, a current stakeholder that was acquired by Sprint parent SoftBank earlier this year.

Terms of the deal have not been disclosed.

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Sprint announced the move earlier this year, saying it planned to merge its Assurance Wireless brand with i-wireless’s Access Wireless in a tie-up of providers of Lifeline services. Lifeline, which launched during the Reagan administration and was expanded to include mobile phones in 2005, provides discounted service to low-income consumers.

Sprint said previously that Paul McAleese, i-wireless’s founder and CEO, will lead the combined businesses. I-wireless is unrelated to iWireless, a T-Mobile affiliate that provides service in Iowa, western Illinois and eastern Nebraska.

Sprint said earlier this year that the move will enable the new business two leverage its nationwide network and i-wireless's distribution footprint, which consists largely of Kroger grocery stores. The Cincinnati-based grocer is the country’s largest supermarket chain by revenue and maintains nearly 2,800 locations throughout the U.S.

"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 the carrier.

The FCC voted in March during a heated meeting to expand Lifeline 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. The Commission voted 3-2 along party lines to allow roughly 40 million Americans to apply the existing $9.25 monthly Lifeline subsidy toward the purchase of mobile or fixed-line broadband service as a standalone offering or bundled with a voice plan.

Lifeline’s prospects are unclear in the wake of Donald Trump’s victorious presidential campaign, however. FCC Chairman Tom Wheeler said this week that the Commission has yet to hear from the incoming Trump administration, and Commissioner Ajit Pai—a Republican who voted against the Lifeline expansion in March—is expected to be named interim FCC chairman.

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