Sprint Nextel set to acquire Virgin Mobile

Sometimes we hear rumors of a deal before it actually goes through. This one seemingly came out of nowhere. I browsed through Howard Forums just yesterday and didn’t see any rumblings about this one: Sprint is set to acquire Virgin Mobile. I’m not good with the financial aspects, but the press release says that the deal will be for “a total equity value of approximately $483 million.” This brings both Virgin Mobile and Boost Mobile under the Sprint umbrella, giving them two of the stronger prepaid carriers out there.

The deal essentially kills another MVNO, as Virgin Mobile will no longer have to purchase minutes wholesale from Sprint. Instead, they’ll work directly with them. Sue Marek of FierceWireless noted just a few weeks ago that “[c]arriers have moved beyond the MVNO business model.” That looks to be true, as only precious few MVNOs still exist in the US.

The biggest move in the deal is for Virgin CEO Dan Schulman, who will now head Sprint’s prepaid business. I wonder how Boost CEO Matt Carter feels about that, as he’ll now have to report to Schulman.

What’s also interesting is seeing how Virgin’s plans will alter, if they will at all, now that they’re under the Sprint umbrella. Will they make their unlimited plan resemble Boost’s? Those are all questions we expect to have answered sometime after the transaction closes. It’s unclear now when that will be.

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2 Responses

1. John Brown Says
   

   First thing they should do is make the virgin mobile $50 unlimited plan match Boost’s plan. Then they should upgrade virgin mobile’s phone selection.

   What good is a unlimited plan if the phone sucks.

   
   Posted on July 28th, 2009 at 2:17 pm
2. jake.iley Says
   

   virgin mobile and boost mobile needs more coverage in more areas also small areas too

   
   Posted on July 28th, 2009 at 4:19 pm

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