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Sprint Could Make $3.0 Billion from Boost Sale

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Selling Boost prepaid business to address antitrust concerns

To persuade federal regulators to approve its merger agreement with T-Mobile (TMUS), Sprint (S) offered to sell its Boost Mobile prepaid brand. Concerns about reducing competition in America’s wireless market have been a sticking point in the review of the T-Mobile-Sprint merger deal by the antitrust division of the DOJ (US Department of Justice). Therefore, agreeing to divest Boost is a concession Sprint and T-Mobile offered to save their deal.

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Boost to T-Mobile-Sprint cash position

According to a Reuters report, the sale of Boost could fetch up to $3.0 billion, which could generate a massive cash boost for the merger parties. Sprint finished the first quarter with $7.1 billion in cash reserves, whereas T-Mobile exited the quarter with $1.4 billion in cash reserves. AT&T (T), which has been cutting jobs and selling non-core assets to raise funds for its debt reduction, finished the first quarter with $6.6 billion in cash. Comcast, Charter Communications, and US Cellular (USM) concluded the first quarter with $3.6 billion, $1.6 billion, and $652 million in cash reserves, respectively. Although their business is majorly cable, Comcast and Charter have also ventured into the business of selling wireless services for mobile phones. Altice USA (ATUS), another cable provider, is also gearing up to enter the mobile service market in the coming months.

Amazon interested in Boost prepaid wireless business

Sprint and T-Mobile could use the cash windfall from Boost sales toward financing their 5G projects. Amazon (AMZN) is interested in purchasing the Boost business from Sprint, sources have told Reuters.

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