According to a filing with the SEC obtained by Light Reading, Dish Network is considering selling its Boost Mobile division to a company called CONX Corporation.
The catch is that CONX was founded by Charlie Ergen, co-founder and current chairman of Dish Network.
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CONX’s (no, I won’t get tired of typing that) filing warns investors that “no assurances can be made that the parties [it and Dish] will successfully negotiate and enter into a definitive agreement.”
While this is true for most merger talks, the fact that Ergen is a higher-up at both companies may make those talks go more smoothly.
I don’t blame you for wondering, “What the heck is a CONX?” Ergen founded a special-purpose acquisition company, or SPAC, in 2020 with the goal of acquiring a company in the “technology, media, and telecommunications industry,” according to Light Reading.
SPACs are essentially shell companies that go public to raise funds from investors and then merge with another company to avoid an IPO (though in this case, Boost Mobile is part of Dish, which is already a publicly traded company). An excellent explanation of SPACs as a concept can be found here.
Dish bought Boost from T-Mobile in 2020, after the latter carrier was required to sell it as part of the FCC agreement that allowed T-Mobile to buy Sprint.
Until now, it appeared that Dish had big plans for Boost; Dish is supposed to become the fourth cell carrier (again, thanks to the T-Mobile Sprint acquisition), and the cell network it’s been building to achieve that goal currently covers around 25% of the US population.
Dish has been allowing people to use that network through a service called Project Genesis, but it’s only available to early adopters. The plan has been to try to entice the general public to use the network through a service called Boost Infinite, which has been set up.
If it sells Boost, I’m not sure where it stands as a carrier. Genesis isn’t ready to be a flagship cell service, and it’d be an odd move to turn its other brands,
such as Ting Mobile and Republic Wireless, into competitors to AT&T, Verizon, and T-Mobile — they’ve been known as low-cost MVNOs for years;
it’d be like Verizon pitching Tracfone as its 5G innovation hotbed. Yes, that’s also true for Boost, but, once again, Dish has been working hard to change that perception.
According to Light Reading, which spoke with analysis firm New Street Research, it could simply be a money play; Boost would get to use CONX’s money instead of Dish’s (while still using its network), and would no longer have to operate in the United States.
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Boost could free up some funds and fundraising capacity to assist in the expansion of the network, which is legally required to reach 70% of the US population by June 14th, 2023.
That may make sense to someone well-versed in the world of big finance, but for those of us trying to figure out which cell plan to get, this could turn what was already a muddled and difficult-to-understand launch into something that requires a few flowcharts and knowledge of the Deep Lore.