Exclusive: T-Mobile, Sprint could sell Boost for up to $3 billion, the potential bidders say

(Reuters) – A group of potential buyers are preparing bids for prepaid wireless brand Boost Mobile in an upcoming sale, the valuation of the offshoot of the AMERICAN wireless carriers T-Mobile US Inc and Sprint Corp at up to $3 billion, interested buyers told Reuters.

FILE PHOTO: The storefront of one of the boost mobile phone store is seen in the Brooklyn borough of New York city, USA, 20 May 2019. REUTERS/Shannon Stapleton

The $26 billion deal between T-Mobile and Sprint won approval from the U.S. Federal Communications Commission last week after the two providers offered concessions. This concerned the sale of an Impetus to reduce the combined company’s market share in the prepaid wireless business, where customers pay for telephone service at the beginning of the month and are not required to have a credit check.

While the deal is awaiting a ruling from the U.S. Department of Justice, the interested parties are already busy with the preparation of bids. The sale is expected to begin after the Justice Department of the review.

Q-Link Wireless, a prepaid brand, and the third largest provider of federally assisted wireless plan, is the compilation of a package to offer for Boost with private equity backing and could pay between $1.8 billion to $3 billion, founder and Chief Executive Issa Asad told Reuters.

The price will depend on the quality of the Boosting of the customers, such as their level of churn, or the rate of the customer is canceled, the devices that they use, and what type of phone plan they are on, none of those companies have made, ” he said.

This month, analysts at Cowen estimated a Boost of 7 million to 8 million customers and a transaction can be valued at $4.5 billion if the deal included wireless spectrum, or the airwaves that carry data, and facilities. Sprint has not indicated the number of Boost customers.

Stephen Stokols, chief executive officer of the prepaid wireless company FreedomPop, said an undisclosed private equity group he is speaking with have been placed Boost the future value of about $4 billion, in an initial public offering.

While FreedomPop is not a bidder, Stokols said, he advises a private equity group to prepare a bid. If that bid succeeds, he is of the opinion that the group would combine their acquisition value, with FreedomPop and have him lead a combined company with the Boost assets.

Peter Adderton, founder of Boost Mobile, which the company sold in the V. S. to Nextel in 2004, which was subsequently acquired by Sprint, has also said he is interested in the purchase of a back-Boost. He refused to comment on his appreciation for the business.

Adderton said that he and his lawyers have urged regulators to require T-Mobile and Sprint to also have to divest wireless spectrum to make sure Boost will be a viable competitor in the market.

Adderton added that the supervisors should also ensure the new T-Mobile does not use anticompetitive practices to the damage increase, and the agreement between the companies must be non-exclusive, which could be encouraged to purchase access to the network of other providers.

The current agreement of sale is devoid of the details, but with the right terms, “we may have to make a dynamic player who will compete in the market,” Adderton said of Boost.

T-Mobile and Sprint not immediately respond to requests for comment.

Reporting by Sheila Dang; Editing by Kenneth Li and Lisa Shumaker

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