Dish Network’s Boost Mobile today announced plans to acquire Gen Mobile, a Los Angeles-based prepaid mobile service provider specializing in serving “cost-conscious” consumers. Terms, including purchase price, were not disclosed. Boost will be acquiring an undisclosed number of subscribers through the acquisition, but Stephen Stokols, who heads Boost and will oversee the Gen Mobile brand, said a key thing is the connection to bridging the digital divide.
Dish is starting to move up market with Boost Mobile, but at the same time, “we don’t want to ignore the under-served market,” he told Fierce.
Stokols said there’s an influx of money going into things like the federal government’s Emergency Broadband Benefit (EBB) program that are meant to bridge the digital divide, and “we want to get more aggressive in that space,” and not necessarily do so under the Boost brand.
Gen Mobile, an MVNO using T-Mobile's network, is an established brand with distribution and the right team to more aggressively get into that space, and that’s an economic demographic that Dish wants to reach with lower priced plans – say with $10, $15 or $20 monthly plans.
Right now, it’s clear that the EBB program isn’t going away, considering the budget allocated to it. For the next few years at least, it represents a big opportunity for Dish, according to Stokols.
“We already have distribution in a lot of areas” where there are qualified customers, he said, so Boost is already kind of playing in that space.
However, as noted earlier, the plan is to move Boost up market, so with the acquisition of Gen Mobile, “we can expand our reach into more areas” where people qualify.
With Dish behind it, Gen Mobile can take a bigger stab at the EBB space.
Stokols spoke more highly of the EBB program than Lifeline, another subsidization program, because the compensation is higher and it doesn’t have a lot of the baggage carried by Lifeline, which was plagued by fraud over the years. EBB is also not a state-by-state system but far more streamlined.
Gen Mobile “allows us to much more aggressively go after that underserved community,” he said. Gen Mobile’s subscriber count is under 100,000, but “the key for us is less about buying the subscribers,” and more about the brand, an existing distribution that’s expanding rapidly and acquiring talent from the team that built out H2O.
Gen Mobile co-founder and CEO Robert Yap will join the Dish team but remain based in the Los Angeles area.
"We founded Gen Mobile to help bridge the digital divide and ensure all Americans have basic affordable wireless access," Yap said in a statement. "Joining forces with Boost allows us to broaden our customer reach, magnify our impact and ultimately connect more Americans."
Dish acquired Boost Mobile via the government’s merger conditions attached to the Sprint/T-Mobile merger. Boost is transitioning off the T-Mobile platform and moving to its own back-office system.
Dish has been embroiled in a battle with T-Mobile over the CDMA network shutdown, and earlier this summer, Dish struck a new MVNO deal with AT&T. But Stokols reiterated that the plan is to use both operators’ networks for the foreseeable future.
“We don’t plan on moving off T-Mobile altogether,” he said. “We’re going to operate with two MNOs,” although AT&T will be where a lot of growth comes.