Sprint to Acquire Virgin Mobile for $483 Million
Sprint has agreed to acquire Virgin Mobile USA for $483 million. Sprint already owns 13 percent of Virgin Mobile. It is buying the carrier to expand its prepaid operations.
Sprint has been struggling to keep its contract subscribers from moving to larger carriers such as AT&T. Its prepaid service, Boost Mobile, however, has been successful. Boost offers a prepaid unlimited plan that has been a hit with the lower-end mobile prepaid market. Virgin Mobile USA is one of Sprint’s largest prepaid competitors. It has 5.2 million customers.
The deal is a stock-swap deal that values Virgin Mobile at a 31 percent premium over its Monday closing price.
Sprint plans to keep the brand’s name and CEO.
The prepaid mobile market is lucrative but highly competitive. In an economic climate where cash-strapped consumers are looking for ways to cut costs, prepaid cell plans are luring consumers in by offering no credit checks and low monthly costs.