People shaking hands

Dish Plans To Acquire Gen Mobile

Today, Dish’s Boost Mobile announced its plan to acquire the MVNO Gen Mobile. While the deal hasn’t officially closed and will need regulatory approval, I don’t expect any major hurdles will get in the way.

Gen Mobile focuses on budget-friendly plans, and Dish may be hoping to use the brand to market services to customers that are eligible for subsidies through the government’s Lifeline program.

Dish has now acquired four carriers in a relatively short span of time:

  • Boost Mobile
  • Ting
  • Republic Wireless
  • Gen Mobile

While I don’t know how large Gen Mobile’s subscriber base is, I expect Gen Mobile has substantially fewer customers than any of the other carriers Dish has acquired.

Mint Mobile Rumored To Be Considering Sale To Altice USA

An article published by the New York Posts relies on an unnamed source to suggest Mint Mobile is looking for a buyer. Mint allegedly hopes to sell for the better part of a billion dollars. Altice USA, the company behind Optimum Mobile, is rumored to be the most likely acquirer:

Mint is shopping itself and could sell for as much as $600 million to $800 million, according to a source with direct knowledge of the situation. Altice USA, which owns cable, phone, internet, and wireless services, is said to be the lead buyer, although it’s unclear whether it will end up closing a deal.

I believe the rumor is true. I’m not sure it’s good news for Mint customers. There’s a lot to like about Mint’s business model and price structure. Things often change significantly when a carrier is acquired. However, given Mint’s solid growth, it’s possible an acquirer would be content to let Mint continue on its current path.

Actor Ryan Reynolds will make a good chunk of change if a deal goes through. The source behind the New York Post article suggests Reynolds owns 20-25% of the business.

Handshake

Dish Plans To Acquire Republic Wireless

Today, Dish announced plans to acquire Republic Wireless and its roughly 200,000 customers. The deal is expected to close in the second quarter of this year.

According to Dish’s press release, Republic Wireless customers won’t see any immediate changes or need to take any immediate action. I’m unsure what the outlook is for the future. Dish has already been explaining substantial churn in Boost subscribers it acquired as “shedding unprofitable customers.” We may see something similar happen as Dish takes control of the Republic Wireless customer base. Dish may also run into some troubles handling some Republic Wireless customers if T-Mobile sticks with its plan to shut down the Sprint CDMA network near the beginning of next year.

Green traffic light

Tracfone Acquisition Gets A Green Light

Earlier this year, Verizon announced plans to acquire Tracfone and its roughly 20 million subscribers. Before an acquisition like this one becomes official, companies have to notify the FTC and DOJ. Here’s how the FTC explains the process:

The Hart-Scott-Rodino Act established the federal premerger notification program, which provides the FTC and the Department of Justice with information about large mergers and acquisitions before they occur. The parties to certain proposed transactions must submit premerger notification to the FTC and DOJ. Premerger notification involves completing an HSR Form, also called a ‘Notification and Report Form for Certain Mergers and Acquisitions,’ with information about each company’s business. The parties may not close their deal until the waiting period outlined in the HSR Act has passed, or the government has granted early termination of the waiting period.

It looks like Verizon’s acquisition of Tracfone was granted an early termination of the waiting period:

Screenshot from the FTC's website

Verizon Hints At Plans For Tracfone Subscribers

Earlier this year, Verizon announced plans to acquire Tracfone and its roughly 20 million subscribers. While more than half of Tracfone’s subscribers already have service that runs over Verizon’s network, it has been unclear what might happen to the 8 to 9 million Tracfone subscribers on other networks.

In an investor event a few days ago, Ronan Dunne, a Verizon executive, hinted at how Verizon might handle those subscribers if the acquisition goes through:

Just for context, about 13 million of their [Tracfone’s] 21 million, 22 million customers ride on the Verizon network today, but there’s 8 million or 9 million thatride on competitor networks. And we have the opportunity to migrate those across to be on to Verizon.

I’m not sure how seriously I should take Dunne’s words. I still think Verizon may sell off Tracfone subscribers on other networks—selling off some subscribers may appease regulators who are reluctant to allow the acquisition.

Consumer Cellular Being Sold To A PE Firm

The private equity firm GTCR is planning to purchase a majority stake in the carrier Consumer Cellular for 2.3 billion dollars. With roughly four million subscribers, the purchase price comes out to over $500 per subscriber. The deal is expected to close in late 2020.

I don’t know what source Mike Dano of Light Reading is relying on, but he seems to have insights into the details of the sale:

After a bidding war that involved Dish Network, Altice USA, Ultra Mobile, a group led by Boost Mobile founder Peter Adderton and others, Chicago private equity company GTCR has purchased Consumer Cellular for around $2.3 billion.

A year of acquisitions

The wireless market in the U.S. has seen a lot of movement lately. Sprint, Ting, Boost, Consumer Cellular, and a whole bunch of brands owned by TracFone have either been acquired in the last year or are in the process of being acquired.

The latest deal with Consumer Cellular presents interesting contrasts with the acquisition of Boost Mobile. DISH paid about 1.4 billion for roughly 9 million Boost subscribers. The cost per subscriber in the Boost acquisition came out to about $150, roughly one-fourth of the cost per subscriber in the Consumer Cellular acquisition. Consumer Cellular’s lower churn rate may explain some of the discrepancy.

Verizon To Acquire Bluegrass Cellular

Verizon is planning to acquire over 200,000 subscribers and some assets from Bluegrass Cellular, a network operator in central Kentucky. In comparison to recent mergers and acquisitions in the cellular industry, this latest acquisition is small. Bluegrass subscribers represent less than 0.1% of subscribers in the U.S. market.

Earlier this year, I was surprised to see a company as small as Bluegrass on the short list of only eight carriers that support the latest Apple Watches. I wonder if Bluegrass only made the list because an acquisition by Verizon was in the works.

The planned acquisition will have to be approved by the FCC. Verizon expects the deal to close in late 2020 or early 2021.

Verizon Plans To Acquire Tracfone

This morning, Verizon announced plans to acquire Tracfone. The planned deal will involve an acquisition of the Tracfone brand and a bunch of subsidiary brands like Total Wireless, Straight Talk, and SafeLink.

At the moment, these brands have about 21 million subscribers. The deal is slated to be worth six or seven billion dollars (or about $300 per subscriber):1

The consideration for the transaction will include $3.125 billion in cash and $3.125 billion in Verizon common stock, subject to customary adjustments, at closing. The agreement also includes up to an additional $650 million in future cash consideration related to the achievement of certain performance measures and other commercial arrangements.

Along with the subscribers and brand names, Verizon is acquiring Tracfone’s roughly 850 employees and Tracfone’s retail presence in over 90,000 locations.2 Verizon expects the deal to close in the second half of 2020.

Reflections & open questions

Tracfone and Verizon will need to pass through some regulatory hoops before the deal is official. If the acquisition goes through, it will cause a massive shift in the industry. Tracfone’s user base makes up about 5% of the U.S. wireless market and a major share of the prepaid market.3

At this time, I’m guessing Verizon will continue to operate several Tracfone brands rather than consolidate Tracfone subscribers under the Verizon brand name.4 Years ago, a Verizon executive discussing Verizon’s lackluster number of prepaid subscribers stated the following:5

“Our retail prepaid is above market. We’re really not competitive in that environment for a whole host of reasons and it’s because we have to make sure that we don’t migrate our high-quality postpaid base over to a prepaid product…Quite honestly, we use the Tracfone brand as our prepaid product.

About 13 million of Tracfone’s subscribers already have service running over Verizon’s network.6 I don’t know what will happen to the 8 million subscribers on other networks. I’m guessing Verizon will try to transition most of them to the Verizon network, but Verizon may sell the subscribers to other carriers.

When the merger between Sprint and T-Mobile closed, I wrote:

I continue to think the merger is going to be bad for consumers over the long term.
I’m guessing the merger between Sprint and T-Mobile contributed to the viability of Verizon’s Tracfone acquisition. As with the merger, I’m not optimistic about the effects this new acquisition will have on consumers in the long term.

Reflecting On Ting

Ting had a phenomenal reputation for its customer support. Given that lackluster support is par for the course in the cellular industry, it’s particularly impressive that Ting managed to buck the trend while offering a low-cost service.

Earlier this month, DISH acquired Ting’s subscriber base. DISH’s customer support has a lousy reputation. I’m worried that a lot of what made Ting special will disappear as subscribers gradually become integrated with DISH.

While I’m sad to see Ting changing, the recent moves were reasonable for Tucows, Ting’s parent company. Here’s a screenshot I took showing the change in Tucows’ share price in the handful of hours after the news about the acquisition of Ting’s subscribers went public:

Tucows' stock rose over 16%

Changes for Ting subscribers

I’ve found Elliot Noss, Tucows’ CEO, and many of Ting’s employees to be unusually straight talkers. While understandable, it was a bit disappointing that some of the usual candor was missing in statements and discussions related to the acquisition. Still, light was shed on important factors that could affect Ting subscribers going forward. The excerpts below come from Elliot Noss’ Reddit post.

Pricing

For those following, DISH is now becoming a fourth competitor in mobile with T-Mobile taking over Sprint. We are going to help them grow their business and try and make tens of millions of customers as happy and satisfied as you all have been. And for you, soon, DISH will be offering much improved pricing.

I have no reason to doubt that prices will come down. Ting did a great job pushing forward pay-for-what-you-use pricing, but Ting’s data charges haven’t been competitive with the rest of the market for several years. While I expect data prices will come down, I don’t know if DISH will let Ting’s customer base stick with pay-for-what-you-use pricing indefinitely.

Customer support

Our customer service people will still be the ones answering your calls, etc. for the first while and before they are not we intend to help DISH be able to provide service that has you just as happy.

In my view, Ting managed to offer far better support than any of the major carriers offer their own, postpaid customers. I seriously doubt DISH’s customer support will offer the same quality that Ting’s support agents offer.

Ting’s Subscriber Base Acquired by DISH

News came out today that most of Ting’s assets, including Ting’s mobile customers, have been acquired by DISH:1

Effective August 1, 2020, most Ting Mobile customers across the U.S. became customers of DISH. These customers will continue to use their current phones and will enjoy the same rates and excellent customer experience. As with DISH’s recently acquired Boost customers, these Ting Mobile customers will have access to the new T-Mobile network.

Tucows, Ting’s original parent company, will retain ownership of Ting’s technology stack. Tucows plans to offer Mobile Service Enabler (MSE) solutions to help wireless carriers run their businesses. Here’s a bit of information I received from Tucows’ PR team:

Now, as a Mobile Services Enabler (MSE), Tucows is opening up its mobile platform and the foundation on which the MVNO Ting Mobile was built. The same platform that helped Ting Mobile create some of the happiest mobile customers and top Consumer Reports lists year over year. DISH is becoming Tucows’ first MSE customer—starting with Ting Mobile, and adding Boost Mobile’s estimated 9 million customers in the 2nd half of 2021.

The Verizon Network

So far, I haven’t seen Ting directly address the plans for the carrier’s Verizon-based service. An email from Ting’s PR team said there would be “no data migration, service interruption or billing changes.”

I expect customers on Ting’s Verizon-based service will not be forced to migrate immediately. I’m not sure what will happen in the long term.