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

(Reuters) – A group of potential buyers are preparing deals for the prepaid wireless brand Boost Mobile at a forthcoming sale evaluating the byproducts of US mobile operators T-Mobile US Inc. and Sprint Corp up to $ 3 billion, indicated interested buyers to Reuters.

The $ 26 billion deal between T-Mobile and Sprint was approved by the US Federal Communications Commission last week, after the two carriers offered concessions. It included the sale of Boost in order to reduce the combined company's market share in the prepaid mobile services sector, customers paying for the telephone service at the beginning of the month and not having to pass a credit check.

While the agreement awaits a decision by the US Department of Justice, interested parties are already preparing bids. The sales process should begin after the review of the Department of Justice.

Q Link Wireless, a brand of prepaid services and the third largest provider of wireless packages benefiting from federal assistance, is preparing a call for bids for Boost with equity financing and could shell out between 1, $ 8 billion and $ 3 billion, told Reuters the founder and CEO, Issa Asad.

The price will depend on the quality of Boost's customers, such as their churn rate, the rate of customer cancellations, the devices they use and the type of package they subscribe to, which companies do not have. revealed. I said.

This month, analysts at Cowen have estimated that Boost has between 7 million and 8 million customers and a transaction could be valued at $ 4.5 billion if the operation included wireless spectrum, or the waves that carry data, and facilities. Sprint did not reveal the number of Boost customers.

Stephen Stokols, President and CEO of FreedomPop prepaid mobile phone company, said a privately held private equity group he had talked to put the future value of Boost at around $ 4 billion, as an initial public offering.

Although FreedomPop is not a bidder, Stokols stated that it advised a private equity group to prepare an offer. If this offer is successful, he thinks that the group will combine their acquisition with FreedomPop and ask him to run a company resulting from the merger with the assets of Boost.

Peter Adderton, founder of Boost Mobile, who sold the US business to Nextel in 2004, then bought out by Sprint, also said he was interested in buying Boost. He declined to comment on his assessment of the company.

Adderton said he and his lawyers had asked the regulators to demand from T-Mobile and Sprint that they also divest wireless spectrum in order to make sure that Boost will be a viable competitor. on the market.

Adderton added that regulators must also ensure that the new T-Mobile does not use anticompetitive practices to harm Boost, and the contract between the companies should be non-exclusive, which would allow Boost to continue. buy network access to other operators.

The current sales contract is devoid of details, but with the right conditions, "we can create a dynamic player that will be competitive in the market," Adderton told Boost.

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