July 31, 2017
US-based mobile network Sprint Nextel has acquired Virgin Mobile USA for a reported fee of $483 million.
Sprint, the US’s third largest carrier, said it made the acquisition to increase its market share in the prepaid segment.
Virgin’s five million customers, the majority of whom use pre-paid services, will join three million pre-paid customers on Sprint’s Boost network.
“The acquisition of Virgin Mobile USA positions Sprint for even greater success in the pre-paid wireless segment,” Sprint said.
“Pre-paid is growing at an unprecedented rate with consumers keenly focused on value.
“Virgin Mobile is an iconic brand in the marketplace that will complement our Boost Mobile brand.”
Sprint, which already held a 13.1% stake in Virgin Mobile USA, acquired the holdings of Virgin Group and SK Telecom in all shares deal that values Virgin stock at $5.50 per share.
The acquisition follows reports of Sprint losing almost one million contract customers in the second quarter.
The USA’s mobile market is currently post-paid contract heavy, with four in five mobile users on a post-paid contract at the end of 2016.
In related news, Virgin Group sold its 50% stake in Virgin Mobile Canada to Bell Canada earlier this month.