Ryan Reynolds used his celebrity and wit to build Mint Mobile into a low-cost competitor in the crowded wireless business.
Now, the Hollywood star and his backers are cashing in: selling the upstart brand to T-Mobile US Inc. in a cash and stock deal valued at up to $1.35 billion. Mr. Reynolds owns roughly 25% of Mint Mobile, according to people familiar with the matter. That means he stands to personally receive more than $300 million in cash and stock from the transaction.
Mint Mobile resells service using T-Mobile’s network, so the deal will save costs but doesn’t bring new customers to T-Mobile. The companies didn’t disclose how many customers Mint Mobile has.
Over the long term, we’ll also benefit from applying the marketing formula Mint has become famous for across more parts of T-Mobile, T-Mobile Chief Executive Mike Sievert said.It gives T-Mobile another prepaid brand, along with Metro by T-Mobile and Connect by T-Mobile, that caters to lower-income users. Mint charges as little as $15 a month. T-Mobile ended 2022 with about 21.4 million prepaid subscribers.
Will Feuer & Lauren Thomas
I’m not sure why this piece of news popped up recently on the Vergecast – the deal itself was struck more than two years ago, and completed last year – but I found it very indicative of the American economy. Mint Mobile has always operated as a MVNO on T-Mobile’s network, meaning that Mint did not own any wireless infrastructure, instead leasing access to T-Mobile’s towers and spectrum to provide service to its customers. So essentially Ryan Reynolds took T-Mobile’s services, put a different label on them, used his fame to attract customers, then sold this thing back to the owner for a hefty profit!
Was there any value-add created here to justify a $1.35 billion price tag? Doubtful, if you ask me. Customers seemed happy with the service and lower prices, but this is something T-Mobile could have offered directly at any point – and they will be going forward, after taking over Mint’s operations.
I keep going back to the endless comparisons between US and European growth metrics; on paper, this transaction adds $1.35 billion to US GDP figures, but in real terms nothing consistent was produced here, aside from a branding exercise. It did not expand access to wireless infrastructure, since Mint was piggybacking on T-Mobile’s network; I doubt that it expanded the market, since most people already have a mobile data plan by this point, at most it shifted clients around between carriers. It’s just another case of the rich making more money by leveraging their already privileged status, their fame, connections, and wealth. I think if we were to scratch the surface, a sizable chunk of US’ growth is built on similar transactions that create money on paper, but do not add meaningful value to the economy.
Post a Comment