Sprint-Nextel to acquire Virgin Mobile

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Sprint-Nextel to acquire Virgin Mobile

July 28, 2009 – 2:22 pm – No Comment

There used to be a few big players in the Virtual Wireless network game also known as a MVNO or mobile virtual network operator. Virgin Mobile was one of them. Not long ago the MVNO bought Helio and things seemed to be good for both operators.

Today, Sprint Nextel announced that it would be acquiring Virgin Mobile and merging it with the Boost brand. Boost is currently Sprint’s prepaid division that runs on its Nextel towers.

Sprint will be buying Virgin Mobile for $483 million in stock. It already owned 13.1% of Virgin Mobile USA.

Under the agreement, which has already been approved by the boards of both of the companies, Sprint will end up retiring all of Virgin Mobile’s outstanding debt. The debt the company has is expected to be no more than $205 million on September 30th. Sprint will also be issuing between 81.4 million and 104.7 million shares of common stock in exchange for the Virgin Mobile USA common and preferred stock.

“The acquisition of Virgin Mobile USA positions Sprint for even greater success in the prepaid wireless segment,” Sprint Nextel president and chief executive Dan Hesse said in a statement.

“Prepaid 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.”

It appears as though the MVNO is a thing of the past. Prepaid services are a good deal at times, but many people just want to stick with the post-paid plans.

Helio was supposed to be huge in the United States because when it was being announced it was supposed to be bringing all of the cool phones from South Korea over to the United States. The idea never really took off and the brand was bought by Virgin Mobile.

Virgin Mobile had its fair share of marketing also. A few years ago, it launched a campaign geared toward the demographic that wanted a cell phone but weren’t old enough to have their own plans. It worked for awhile, but as you can see, the company was bought up by Sprint.