2019-10-22 09:38:071970-01-01 00:00:00

Boost Mobile Takes on Amazon

Boost Mobile is a wireless telecommunications brand with companies in both Australia and USA. It was founded in 2000 by Peter Adderton who is currently the largest shareholder in the company. Since its opening, Boost branded services were provided by the Optus network, up until 2012 where Optus decided to end its business with boost. In retaliation, Boost entered into a deal with Telstra as Boost began to offer products under the brand of ‘MVNO’ hosted on the Telstra Next G Network.   

After founding the company in Australia and New Zealand in 2000, Adderton and Kirk McMaster brought the mobile brand in the United States in 2001 as a joint venture with Nextel Communications. At the time, Boost mobile offered an unlimited push-to-talk service using Nextel’s iDEN network, only costing customers a dollar a day. Nextel communications acquired Sprint Communications in 2006, who began to offer a new unlimited service using Sprint’s CDMA network, offering unlimited calls, texts and internet data.

Boost mobile regularly sponsors sport teams and sporting events. Some sponsorships include: RockCorps, the WNBA, and the surfing event ASP World Tour. As of 2019, Boost is the naming rights sponsor of Garry Rogers Motorsport in the Australian Supercars championship.

Adderton sold the U.S business to Sprint in 2004 but now believes he can take back control in a move that would be beneficial to the Australian business. This will be difficult now as Sprint is planning to sell boost as part of a merger with telecommunications giant T-Mobile. Adderton said Amazon, Facebook and Mexican multi-millionaire Carlos Slim are possible buyers of Boost USA.  This has now turned into a bidding war, with Adderton confident that he can raise the necessary capital through private equity.

Adderton’s vision to merge Boost Australia and USA

Mergers and acquisitions is a term that refers to the alliance of companies or assets through various financial transactions. In a merger, the board of directors of the two companies will approve the combination and seek shareholder’s approval. Sprint’s merger with T-Mobile is a deal that can be compared to Vodafone’s merger with TPG as both would see third and fourth largest players in the mobile network operation running a business together. Adderton believes that buying back Boost USA will cost “a few billion” but is not worried about raising capital as he has a shrewd experience raising capital in the USA (raised $US1 billion for other companies in America). If successful, Adderton would take Boost USA and combine his Australia in a merger and take the company to an initial public offering.

Adderton’s Australian business is a mobile virtual network operator (MVNO), which in Boost’s case is Telstra. Statistics show that his Australian business is very small compared to other companies in the mobile sector. IBISWorld, who do market research and analysis estimated a total revenue for the MVNO market as $749.8 million. Telstra, Optus and Vodafone continue to dominate in the Australian mobile retail market.

With the backing of a big international brand, Adderton will be pushing for major changes in the Australian market- including regulating the currently unregulated MVNO market.

Vodafone-TPG Mega Merger

The Australian Competition and Consumer Commission (ACCC) blocked the $15 million merger earlier in the month as they expressed concerns for competition if the deal was to go through. With Vodafone’s high end network and TPG’s low prices, the consumer watchdog believes that consumers will be left with limited choices for purchases of mobile phones, land line and internet deals. A merger like this can have many negative consequences to Adderton’s plans and ultimately his company. Adderton strongly supports the ACCC’s decision and boasts Boost’s aggressively competitive prices and its strong relationship with Telstra. Industry experts however believe the telco companies stand a good chance at reversing the ACCC’s decision.

Adderton trusts that consumers would win big time if the three network operators were required to allocate 30 per cent of their traffic to MVNO’s as under the current rule, the operators are under no obligation to give MVNO’s any access to their networks. This would eventually cause a big downfall for Boost products.

Future of prepaid and MVNO’s, unknown

According to analysis in a Wall Street research firm, prepaid sales across the US has significantly decreased since 2015 however if the T-Mobile and Sprint is enacted, it will be selling the nation’s second largest MVNO. The companies have promised that whoever buys boost will get access to the new T-Mobile network.  Sprint and T-Mobile will aim to finalise the sale within three months after closing their merger.

Peter Adderton seems best set for taking back his Boost USA business, backed by several investors to fund a bid. Adderton will definitely be able to leverage his understanding in managing Boost in Australia to create a demand in the US market.

By Rizwan Sayeed

Click here for a 7 days access to our Lotus Blue Portal.

KOSEC does not take into account the investment objectives, financial situation and advisory needs of any particular person, nor does the information provided constitute investment advice. Under no circumstances should investments be based solely on the information provided. KOSEC is intended to provide general information only. Please be aware that investing involves the risk of capital loss. This message is confidential and may be privileged. It is intended only for the use of the addressee named above. If you are not the intended recipient, any unauthorised dissemination, distribution or copying is illegal. We do not guarantee the security or completeness of information hereby transmitted and are not liable in either respect or in respect of any delay. Nothing in this message is intended as an offer or solicitation for the purchase or sale of any financial instrument. Any market prices or data, unless specifically verified and identified as such, are not warranted as to completeness or accuracy. Kodari Securities Pty Ltd (KOSEC) is a Corporate Authorised Representative (No. 399 556) of Longhou Capital Markets (AFSL No. 292464) which is regulated by the Australian Securities and Investment Commission (ASIC). KOSEC wishes to disclose that KOSEC and its staff may hold stock they recommend in their own portfolios and that any decision to purchase recommended stock should be done so after the purchaser has made their own inquires as to the suitability to their own requirements. Click here to view our FSG.

KOSEC Terms & Conditions

Kodari Securities Pty Ltd (CAR 399556) trading as KOSEC is regulated by the Australian Securities and Investment Commission (ASIC). KOSEC is a financial services company and any information provided by its platforms, portals, reports and documents is protected by copyright. Any unauthorised production of this information is prohibited.
KOSEC reserves the right to change or remove any information provided on our website, reports or any documents including these terms and conditions at any time without notice. The change or modification to the terms and conditions will be effective immediately upon posting an updated version on our website, necessary platforms and documents. It is recommended that you review the information provided on our website, including these terms and conditions frequently for any changes.

Disclaimer
KOSEC provides general advice only. The information provided is of a general nature only and does not take into account your individual objectives, financial situation or needs. It should not be used, relied upon, or treated as a substitute for specific professional advice. KOSEC recommends that you obtain your own independent professional advice before making any decision in relation to your particular requirements or circumstances. Please make sure you read our Financial Services Guide (FSG).

KOSEC does not guarantee any returns. Past performance of any product discussed is not indicative of future performance. (We urge that caution should be exercised in assessing past performance. All financial products are subject to market forces and unpredictable events that may adversely affect their future performance). Investing in the stock market can incur huge losses. Please also be aware that fees will incur on every transaction regardless of the performance of your investments or returns generated. Employees and or associates of KOSEC may hold one or more of the stocks, securities or investments reviewed by the company.

Your use of information from our website, reports, documents and from talking to our representatives/associates is at your risk. Under no circumstance should the investment be based solely on KOSEC information and general advice. You should seek professional financial planning advice.
KOSEC aims to maintain the accuracy of the data and information provided on this website, by using information prepared from a wide variety of sources, which KOSEC to the best of its knowledge and belief, considers accurate and does not make any representations or warranties of any kind, expressed or implied, about the completeness, accuracy, reliability, suitability or availability of the information provided.

We may at times refer to third parties, which the details of these third parties have been provided solely for you to obtain further information about other relevant products and entities in the market. KOSEC has no control over the information third parties have, or the products or services offered, and therefore make no representations regarding the accuracy or suitability of such information, products or services. You are advised to make your own enquiries in relation to third parties. Our inclusion of any third party content is not an endorsement of that content or the third party.

Fees
As a client you will be charged a yearly service fee and a set brokerage fee per transaction. Your service fee will automatically renew at the end of your agreed 12 month period at the same rate advertised at the time. Your credit card or bank account will be charged for a further year following which will again auto renew until you cancel your yearly service fee. You can cancel the auto renewal at any time in advance of the renewal date by contacting us. KOSEC is aware of the need to ensure the security of your credit card details and our payment systems are compliant with the Payment Card Industry (PCI) Data Security Standard.

Privacy
You consent to receiving email correspondence from KOSEC, as well as companies KOSEC has an association with. These emails will be sent by KOSEC and third party companies. You can opt out of receiving any category of emails at any time by contacting us. We may from time to time inform you of special offers, or even ask your opinion of the services we provide, but your involvement is optional. Should you request us to do so, we will archive your details.

Indemnity and Liability
You indemnify KOSEC from all claims or threatened claims, suits, demands, damages, costs as well as including legal costs incurred in dealing with any threatened claim, expenses made by any person or corporation against KOSEC and any other amounts which is caused by KOSEC providing information, execution and General Advice.

You hold KOSEC harmless and release it from any liability in respect of any loss, harm or damage arising from a decision made by you on the basis of information obtained through the use of our portal, reports, documents or any General Advice given and any transaction taken place.

You hold KOSEC harmless and release it from any liability in respect of any loss, harm or damage arising from delays in executing orders for the client and acknowledges KOSEC makes no guarantees about the time taken to execute an order on behalf of the client. You acknowledge that KOSEC relies on third parties in providing technology and release KOSEC from any harm, loss or damage you may suffer as a result of the failure of such information technology.

Cookies and Links
KOSEC website, and its portal uses cookies, which lets us identify your browser while you are using the site or our portal. Cookies do not identify you personally. They simply allow us to track your usage patterns. If you prefer not to receive cookies, you can configure your browser to reject them or to notify you when they are being used. The functionality of the KOSEC website may be impacted if you restrict the use of cookies.

Fill up the form below and we will get back to you as soon as possible.

CLAIM YOUR FREE E-BOOK &
7 DAY ACCESS TO LOTUS BLUE

STOCK MARKET SUCCESS

KOSEC’s CEO, Michael Kodari’s new book, “Stock Market Success” valued at $39.95, available at Dymocks book stores with all the proceeds going to Dymocks Children’s Charities.

CLAIM YOUR FREE E-BOOK WHEN YOU LOGIN TO LOTUS BLUE INVESTMENT PORTAL

Latest TV Commercial