MVNO M&A Transactions

Part
01
of two
Part
01

Mobile Virtual Network Operator M&As Part 1

Boost Mobile, Dean One, Weex Mobile, and Transatel are some mobile virtual network operators (MVNO) companies acquired in the past 12 months.

BOOST MOBILE

  • Acquirer: Dish
  • Acquiree: Boost Mobile
  • Number of customers: 15 million
  • Deal value: $1.5 billion
  • Geographical coverage through acquisition: the United States and Australia
  • Deal overview and notable information:
    • As a result of this deal and the purchase of spectrum assets from Sprint and T-Mobile, Dish will replace Sprint as the fourth major mobile carrier.
    • The acquisition will put Dish on a new trajectory and gives it an opportunity to reverse its fortunes. Dish's TV business has not been doing well; it lost 256,000 customers in the first quarter of 2019.
    • This deal includes the sale of Boost Mobile and spectrum assets worth $3.5 billion; it gives a thumbs-up to the pending T-Mobile and Sprint merger.

DEAN ONE

  • Acquirer: Gamma Communications
  • Acquiree: Dean One
  • Number of customers: 150,000
  • Deal value: $30.17 million (€27 million)
  • Geographical coverage through acquisition: The Netherlands
  • Deal overview and notable information:
    • Dean One shares many similar attributes with Gamma Communications. It is primarily a channel-led business and is focused on products that Gamma has strong expertise in. The market for Cloud PBX in the UK and Netherlands have similar growth rates and market penetration.
    • Dean One believes that it can achieve accelerated growth as part of Gamma.
    • Gamma will be able to expand its geographic footprint through the acquisition of Dean One. It plans to launch products in the Netherlands that have been successful in the UK.
    • Andrew Taylor, CEO of Gamma, said that Dean One's business is a very good fit and the management of both companies have known each other for years.
    • Dean One generates revenues of $17.65 million (€15.8M) and an EBITDA of $890,000 (€0.8M).

WEEX MOBILE

  • Acquirer: Yonder Media Mobile
  • Acquiree: Weex Mobile
  • Number of customers: 100,000+
  • Deal value: undisclosed
  • Geographical coverage through acquisition: Mexico
  • Deal overview and notable information:
    • Yonder believes that the acquisition will enable it to enter the Mexican market smoothly. It will solidify its operations in Mexico through this acquisition. The acquisition will result in a revaluation of its business.
    • Weex will benefit from Yonder's technology and content creation expertise.
    • Weex also operates a digital wallet by the same name. It will be dropping the Weex name and rebranding and relaunching its MVNO business.

TRANSATEL

  • Acquirer: NTT Communications
  • Acquiree: Transatel
  • Number of customers: provides connectivity to 1.7 million SIM Cards
  • Deal value: undisclosed
  • Geographical coverage through acquisition: France, the UK, Belgium, Luxembourg, Switzerland, the Netherlands, and the United States
  • Deal overview and notable information: Deal overview and notable information:
    • NTT Communications bought a majority stake in Transatel.
    • NTT believes it can use Transatel's expertise in the IoT connectivity to "drive innovation in the development of connected cars, industrial & consumer IoT and smart cities".
    • Transatel will be able to expand its geographic presence to Asia, where NTT is based.
    • NTT Communications believes that they are in a position to scale their business beyond the APAC region. The Transatel acquisition will enable the company to expand into Europe.
Part
02
of two
Part
02

Mobile Virtual Network Operator M&As Part 2

Freedom Pop, Locus Communications (H2O Wireless), Lebara Spain, and Komplett Mobile are some mobile virtual network operators (MVNO) companies acquired in the past 12 months.

FREEDOM POP

  • Acquirer: Red Pocket Mobile
  • Acquiree: Freedom Pop
  • Number of customers: 2 million
  • Deal value: high eight figures (undisclosed)
  • Geographical coverage through acquisition: United States, United Kingdom, Mexico, and Spain.
  • Deal overview and notable information: Deal overview and notable information:
    • Freedom Pop operates on a freemium model. Both Red Pocket Mobile and Freedom Pop compete in the "low-cost MVNO market" and sell multiple plans.
    • Red Pocket Mobile is the only wireless brand in the US that operates on all the major networks. It can be paired with any phone.
    • As a result of this acquisition, Freedom Pop's subscribers will now be able to use any phone and pair them with all network in the US. This means that for the first time, consumers in the US will be able to use any phone on any network for free.
    • Other than coverage, Freedom Pop users will benefit the Red Pocket's top-rated customer service.
    • Freedom Pop's disruptive legacy will combine with Red Pocket Mobile to create the next generation of wireless services --super-innovative and customer-focused.
    • STS Mobile, the parent of Freedom Pop, will use the proceeds of the sale to invest in technology.

LOCUS TELECOMMUNICATIONS

  • Acquirer: Telrite Holdings, Inc. (Pure TalkUSA)
  • Acquiree: Locus Telecommunications (H2O Wireless)
  • Number of customers: 1 million
  • Deal value: undisclosed
  • Geographical coverage through acquisition: United States
  • Deal overview and notable information:
    • The acquisition makes Terlite one of the largest MVNOs in the prepaid market.
    • Pure TalkUSA targets budget-conscious customers, while H2O Wireless offers "no-contract wireless services for every need and budget on the nation’s largest and most reliable GSM networks".
    • It will allow Terlite to expand its footprint and serve no-contract wireless customers who are not being served well by other providers.
    • H2O Wireless customers will benefit from improved offerings post-acquisition.

LEBARA SPAIN

  • Acquirer: Grupo MASMOVIL
  • Acquiree: Lebara Spain
  • Number of customers: 423,000
  • Deal value: $62.3 million
  • Geographical coverage through acquisition: Spain
  • Deal overview and notable information: Deal overview and notable information:
    • Grupo Masovil has an existing customer base of 7 million. The acquisition will increase the customer base by 423,000 and enable it to consolidate its position as the 4th largest telecom provider in Spain.
    • The acquisition will help Masovil "strengthen its leadership in the ethnic segment with a new prestigious brand".
    • It will create operating synergies through a reduction in OMV contract expenses, which will result in EBITDA post-synergies of $26.84 million (€24 M).
    • Lebara Spain's annual revenue is $55.93 million (€ 50M)

KOMPLETT MOBIL

  • Acquirer: Ice Communication Norge
  • Acquiree: Komplett Mobil
  • Number of customers: 74,740
  • Deal value: $12.1 million
  • Geographical coverage through acquisition: Norway
  • Deal overview and notable information:
    • Ice's offering is very similar to that of Komplett Mobil and it is strong competition to Komplett.
    • The deal value is subject to change based on whether Komplett customers remain customers of Ice.
    • Ice is the fastest growing network operator and covers 89% of Norway. Increasing the customer base will help Ice improve its competitiveness.

RESEARCH STRATEGY

All the M&A deals identified happened in the 12 months leading up to 14th August 2019. The geographical coverage information provided is that of the acquiree. It indicates possible geographical expansion of the acquiree; however, all the above acquisitions pertain to expansion within existing geography.
Sources
Sources

From Part 01
From Part 02