The Federal Communications Commission (FCC) has approved T-Mobile’s acquisition of Ka’ena Corp, the owner of budget cellular service providers Mint Mobile and Ultra Mobile, for up to $1.35 billion.
FCC approval is conditioned on T-Mobile implementing a 60-day device unlock policy for all Mint Mobile and Ultra Mobile devices operated on the T-Mobile network, both before and after the deal closes. This is expected to simplify the process for Mint Mobile and Ultra Mobile customers looking to switch their service providers.
T-Mobile CEO Mike Siebert expressed excitement about welcoming Mint and Ultra Mobile to the family, during earnings call On Thursday:
“I’m so happy to report that we’ve received regulatory approval to acquire Mint and Ultra Mobile. We’re really looking forward to welcoming them to the ‘non-portable’ family. And I know they’re going to fit in because they’re hyper-focused on offering customers compelling products at a great price.” “
With this acquisition, T-Mobile should expand its market share in the competitive telecom industry and gain access to a larger segment of the pay-as-you-go customer demographic. T-Mobile is also looking to capitalize on Mint Mobile’s successful direct-to-consumer business model and even its own marketing expertise, which often features the involvement of celebrity co-owner Ryan Reynolds, amid increasing competition from rivals like Verizon and AT&T.
For the transaction, which is estimated to be worth up to 1.35 billion dollars, the final purchase price will be determined according to Caina’s performance in certain periods before and after the closing of the transaction. The agreement consists of 39% cash and 61% stock.
Mint Mobile’s unique marketing tactics, such as the response to the COVID-19 pandemic in 2020 where Ryan Reynolds left a voice message for customers informing them of free unlimited data, have contributed to the brand’s growing popularity and appeal among consumers looking for cheaper mobile service options. Ryan Reynolds will continue to play a creative role for the brand.
After receiving regulatory approval from the FCC, T-Mobile expects to close the acquisition on May 1.
Through Reuters