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Telstra Group (ASX: TLS) has acquired prepaid mobile services provider Boost Mobile in a deal that is understood to value the business at close to $100 million.
The acquisition, which is expected to be completed this month, follows a long-standing commercial arrangement between the companies that stretches back to 2012.
Telstra was previously responsible for most of the operational parts of the Boost Mobile business, including network access, product development, pricing and customer service, while Boost Mobile was responsible for branding and marketing.
Brad Whitcomb, the group executive for Telstra Consumer, says the acquisition consolidates all aspects of the Boost Mobile business under one roof and will enable Telstra to “better deliver on its multi-brand strategy”.
"Boost Mobile has been a fantastic partner of Telstra for 13 years and this acquisition cements just how much we value the Boost brand,” says Whitcomb.
“We know Boost-branded products are a fantastic option for those seeking more affordable mobile connectivity and we are committed to providing that choice in the market."
While commercial terms of the deal have not been disclosed, it is understood to value the Boost business at close to $100 million.
"Telstra has been an incredible partner to the Boost mobile family and, more importantly, to our customers for more than 13 years,” says Boost Mobile chairman Peter Adderton.
“This acquisition of Boost is the natural evolution of the brand, and I am excited to see how the brand will continue to grow under Telstra's ownership.
“The team at Boost are the best in the business and I wish them all well on the next part of Boost Mobile's journey".
Boost Mobile was founded by Adderton in Sydney in 2000, with Optus licensing the Boost Mobile brand that same year.
After Optus severed ties in 2012, the “youth mobile” Boost brand secured a telco partnership with Telstra to provide its pre-paid mobile phone services.
The US-based Adderton, who is also founder of Nasdaq-listed Digital Turbine, is currently CEO of mobile phone carrier MobileX – a role that he hopes can help him fully achieve his original vision for Boost Mobile.
“Ever since I founded the Boost mobile brand I wanted to build the first global mobile brand,” says Adderton in a post on LinkedIn.
“I never was able to fully achieve that dream of giving consumers all over the world a choice and a voice with the Boost brand.
“With today’s announcement of the sale of the Boost Mobile brand in Australia to Telstra I can now focus 100 per cent of my energy on finishing that dream with the MobileX global brand.
“Boost has given me an incredible 20-plus years of fun, adventure, many highs and some lows, but in the end I hope our Boost customers knew we got up every day and fought for them that fight will continue for me and the whole team at MobileX, and I will finish the dream of building that global brand.”
Telstra says there will be no change for customers to Boost-branded prepaid plans following its acquisition.
The telco plans to integrate most of Boost Mobile’s employees into Telstra as a stand-alone team.
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