Ergen's SPAC to take control of MobileX in $200M deal
What's the deal? Charlie Ergen has agreed to acquire a controlling stake in wireless-service provider MobileXDealroom has a profile for this one. Try Dealroom → through his special purpose acquisition company, CONXDealroom has a profile for this one. Try Dealroom →, according to people familiar with the matter. The deal values MobileX at about $200 million and requires regulatory approval.
Who's who? Ergen is co-founder and chairman of EchoStarDealroom has a profile for this one. Try Dealroom →, whose portfolio includes wireless brand Boost MobileDealroom has a profile for this one. Try Dealroom → and pay-TV business Dish NetworkDealroom has a profile for this one. Try Dealroom →. MobileX, founded in 2019 by Peter Adderton, leases and resells excess capacity from VerizonDealroom has a profile for this one. Try Dealroom →'s network.
Adderton — who founded Boost Mobile in 2000 and sold it to NextelDealroom has a profile for this one. Try Dealroom → in 2003 — will remain chief executive of MobileX, some of the people said.
What's changing? The deal also gives Verizon a minority stake in MobileX by converting a loan into equity. It wasn't immediately clear whether Ergen plans to combine the operations of MobileX and Boost Mobile.
Why now? EchoStar has lost money on wireless services for years, and Adderton has publicly criticised how it runs Boost Mobile. "We haven't cracked the code on how to be successful to the level we'd like to in the wireless business," Ergen said on an earnings call earlier this month. "We've treaded water for four years now."
What's the endgame? Ergen abandoned a $46 billion effort to build a nationwide 5G competitor last year after the Federal Communications CommissionDealroom has a profile for this one. Try Dealroom → complained about slow progress. He has since put Dish subsidiaries into bankruptcy protection and is positioning EchoStarDealroom has a profile for this one. Try Dealroom → to emerge with tens of billions of dollars from spectrum sales, including to SpaceX.
The signal: Both MobileX and Boost Mobile remain small relative to AT&TDealroom has a profile for this one. Try Dealroom →, T-MobileDealroom has a profile for this one. Try Dealroom →, and VerizonDealroom has a profile for this one. Try Dealroom →, which together control more than 90% of the US cellphone market, according to MoffettNathansonDealroom has a profile for this one. Try Dealroom →. The deal marks Ergen's latest attempt to reshape a wireless business that has struggled for years.
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