- Entrepreneur Charlie Ergen is doubling down on the wireless business by adding the MobileX MVNO property to his current company, Boost Mobile.
- Boost Mobile has not been a great business for its parent company EchoStar, according to Ergen.
- MobileX founder Peter Adderton (who also founded Boost Mobile) will retain an equity stake in, and a leadership role with, MobileX.
EchoStar chairman Charlie Ergen is buying MVNO MobileX for $200 million through his special purpose acquisition company CONX. The deal has been discussed for months, was reported by The Wall Street Journal late Friday, and was confirmed to Fierce Network by analyst Roger Entner, who said he has worked closely with MobileX founder Peter Adderton.
“Charlie admired what Peter has been doing with MobileX,” Entner said. “MobileX does not have a lot of subscribers, but Charlie admired the disruptive business model.” MobileX uses AI to help subscribers customize plans that match their usage, with the goal of helping people pay for only the wireless service they actually need.
MobileX founder Peter Adderton has a history with Charlie Ergen. Adderton founded Boost Mobile and sold it to Nextel Communications in 2003. Boost ended up as part of Sprint in 2005 and Ergen bought it in 2020 as part of the deal that established a “fourth facilities-based carrier” to compete with the merged Sprint and T-Mobile. Since then, EchoStar has sold off its spectrum to AT&T and SpaceX and EchoStar’s Dish Wireless has filed for bankruptcy, leaving its antennas stranded on towers around the U.S. But Dish still operates Boost Mobile, using its AWS-based core network and AT&T’s and T-Mobile’s radio access networks.
When Dish announced these plans last year, Peter Adderton posted on LinkedIn: “No one will buy the story that is being spun time for a new MVNO.”
Now Ergen is going to have a new MVNO, in partnership with Adderton.
Why combine Boost Mobile and MobileX?
Analyst Roger Entner said Ergen wants Adderton’s ideas and expertise, and Adderton needs Ergen’s financial backing. Going forward, MobileX will be jointly owned by Ergen’s CONX, Peter Adderton, and Verizon, with which MobileX has an MVNO partnership. According to Entner, Verizon’s equity stake in the new MobileX venture is relatively small, leaving Ergen and Adderton in control.
By combining Boost Mobile and MobileX, Ergen can create an MVNO that has deals with all three nationwide carriers. MobileX and Dish/Boost both operate their own core networks, and it is unclear whether or how those may be merged. Entner said those plans may not yet be finalized, and said he would not be surprised to learn the MobileX core is built in AWS, like the Boost Mobile/Dish Wireless core.
Entner said trying to run Boost Mobile and MobileX as parallel, separate businesses would be “a wasted opportunity.”
He noted that unlike MobileX, Boost Mobile has a strong network of third-party retailers selling its wireless service.
But despite that retail network, Boost Mobile has not been executing as well as it could, according to Ergen. On EchoStar’s most recent earnings call Ergen said the business has “treaded water” for the last four years.
Can Boost Mobile get back on track?
The question now is whether MobileX and Adderton can get Boost on track, or whether these assets will be combined and flipped by Ergen to another buyer. This list of potential buyers is short. SpaceX has said it wants to operate a wireless network, but the big three nationwide carriers have said they don’t plan to do MVNO deals with SpaceX. A sale of Ergen’s mobile business to SpaceX would trigger change of control clauses that could void the existing MVNO contracts.
So it seems likely that EchoStar will double down on the wireless business, at least for now. Ergen is better known these days as a buyer and seller of spectrum assets than as a business operator, but he had a successful history running the Dish satellite business before he tried to pivot to wireless. Peter Adderton has been passionate about the wireless business for decades, and may now be in a position to disrupt the MVNO landscape.
Read more about Boost Mobile and MobileX on Fierce Network
What’s the status of Boost Mobile cell phone service?