T-Mobile said on Wednesday, Mar. 15, that it would acquire Mint Mobile, a low-cost cellphone carrier co-owned by actor Ryan Reynolds, in a transaction for up to $1.35 billion. This decision is consistent with T Mobile's goal of expanding its prepaid product line.
Based on a previous report, T-Mobile started considering buying Mint Mobile back in January.
New Acquisition
T-Mobile announced in a blog post that it had struck an agreement to purchase Ka'ena Corporation, the parent company of prepaid cellular brands Mint Mobile and Ultra Mobile, and wireless wholesaler Plum, for a maximum of $1.35 billion in cash and equity.
According to TechCrunch, the ultimate acquisition price will depend on Mint Mobile's financial performance over a certain time period before and after the transaction. T-Mobile anticipates the transaction to be finalized before the end of the year.
"Mint has built an incredibly successful digital direct-to-consumer business that continues to deliver for customers on the Un-carrier's leading 5G network and now we are excited to use our scale and owners' economics to help supercharge it - and Ultra Mobile - into the future," T-Mobile CEO Mike Sievert wrote.
"Over the long-term, we'll also benefit from applying the marketing formula Mint has become famous for across more parts of T-Mobile. We think customers are really going to win with a more competitive and expansive Mint and Ultra," he added.
What To Expect?
In a video released on Wednesday, Sievert confirmed that Mint Mobile's monthly fee of $15 will remain unchanged.
When the purchase is finalized, Ryan Reynolds will keep working as a creative director for Mint Mobile and making advertisements for the company. T-Mobile has retained Mint co-founders David Glickman and Rizwan Kassim to run the brands as a distinct division.
There are no brick-and-mortar locations for Mint Mobile; the company does all of its operations online. T-Mobile already provides the carrier's service as part of a shared wholesale network arrangement.
To provide some background, Mint Mobile is a mobile virtual network operator (MVNO), which means that rather than owning and managing its own wireless network, it purchases wholesale access to one.
T-Mobile is buying out Mint Mobile's business operations, including sales, marketing, digital, and service, with the intention of using its supplier relationships and distribution scale to boost the company's growth.
This is expected to allow them to provide lower prices and a wider selection of devices to more customers. It will use Mint Mobile's digital D2C marketing (direct-to-consumer marketing) to expand its reach to new demographics of users.
The company has announced that it is adding Mint Mobile and Ultra Mobile to its roster of prepaid service brands, which already includes Metro by T-Mobile, T-Mobile branded prepaid, and Connect by T-Mobile.
