Dish closes $1.4B acquisition of Boost, enters wireless retail business

Dish Network announced it has completed the $1.4 billion acquisition of Boost Mobile, which was one of the conditions for the government’s approval of the T-Mobile/Sprint merger.

The closure has been the topic of much speculation as negotiations between T-Mobile and Dish lingered past a potential June 1 closing date for the deal. Both parties disclosed in June 17 Securities and Exchange Commission (SEC) filings that they were set to close July 1.

With the deal officially sealed, Dish officially enters the wireless retail market, serving more than 9 million customers. Besides Boost, Sprint’s prepaid brands historically operated under the Virgin Mobile and Sprint prepaid brands.

"Today, we are proud to welcome hundreds of employees, thousands of independent retailers, and millions of customers to the Dish family," said Erik Carlson, Dish president and CEO, in a statement. "This marks an important milestone in Dish's evolution as a connectivity company. It positions us well as we continue to build out the first virtualized, standalone 5G network in America."

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The Boost acquisition is part of a series of agreements announced in July 2019 that includes access to the new T-Mobile network as an MVNO for seven years while Dish builds out its 5G network. It also includes the divestiture of Sprint’s 800 MHz spectrum assets to Dish and gives Dish an option to take on leases for certain cell sites and retail locations that are decommissioned by the newly combined T-Mobile/Sprint.

New leader, new logo

In today’s press release, Dish put a few questions to rest. For one, it will continue to use the Boost brand, but it has tweaked the logo to give it a Dish spin. For another, it said that John Swieringa, who serves as group president, retail wireless and COO at Dish, will lead Boost Mobile.

Boost logo

"Boost is uniquely positioned to disrupt this industry. Our passionate team, from employees to retail associates to local business owners, is ready to compete," Swieringa said in a statement. "We'll bring new, exciting products and offers to customers that better meet their needs and fit their budgets. Starting tomorrow, Boost will launch the first of our new offers with the revival of $hrink-It! — rewarding customers with 'the longer you stay, the less you pay.'"

That type of offer sounds like the one that Verizon announced last month, where it said it was "breaking the mold" in the prepaid industry with its “the longer you stay, the more you save” type of offer. The new Verizon prepaid unlimited plan starts at $65 per month and can get as low as $50 after nine months with discounts. 

Boost's new “$hrink-It! Plan” starts at $45 for 15 GB and reduces customers' monthly rates by $5 after three on-time payments and by an additional $5 after six total on-time payments. Dish’s press release noted that Boost previously offered a popular shrinking payments plan, which was available to new Boost Mobile customers until July 2014.

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In addition, Boost offers a $35 10 GB plan that includes unlimited talk and text. Both plans will be available starting tomorrow.

Dish also said that Boost has begun and will continue to activate customers with a compatible device onto the new T-Mobile network, where customers will get a stronger signal, faster speeds and more coverage.

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During Dish’s first-quarter conference call in May, Dish co-founder and Chairman Charlie Ergen said there were certain things that had to happen before it closed the Boost deal and mentioned cross provisioning as an example. At the time, he said that when Dish owns Boost, it would need to provision all its existing customers and new customers on the T-Mobile network – rather than the Sprint network that Boost has been using.

Boost founder unimpressed 

One wireless prepaid industry veteran who’s not impressed with the new direction is Boost founder Peter Adderton. The Boost business was sold to Nextel Communications in 2003, and Sprint acquired Boost when it bought Nextel in 2005. Adderton still owns and operates the Boost brand outside of the U.S.

“It’s not a direction that I would have taken with the brand,” he said, noting that the new logo appears to be the first step toward effectively moving it away from the Boost brand and over to Dish.

The old Boost stood for highly competitive prepaid pricing and the new brand doesn’t give consumers a clear proposition of what it stands for, according to Adderton.

“I think it went from an identity crisis to even more of an identity crisis,” he said. “It didn’t know what it was inside of Sprint.”

RELATED: It’s up to Dish to make Boost great again: Adderton

“To me, it’s not like cable companies’ brands and satellite companies’ brands have tremendous equity in consumers’ minds, so to take a brand that I think had great equity in the wireless consumers’ minds and add in a satellite company’s logo to it, to me that doesn’t really add up. But it’s theirs, so I guess they can do whatever they like with it.”