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Sprint’s Closure of Virgin Mobile USA Could Make Life Easier for Dish, Analyst Says

By | January 8, 2020

Photo: Virgin Mobile USA

Sprint is closing its Virgin Mobile USA prepaid wireless business. A note to customers posted on the website in early January said that Virgin Mobile USA will be discontinued and customers will be transferred to its sister brand Boost Mobile in February. 

“To ensure that we offer the best service to our customers, we regularly examine our plans. At this time a decision to discontinue the Virgin Mobile USA service has been made,” the statement said. 

This shuttering comes amidst the Sprint and T-Mobile merger — which the Federal Communications Commission approved in November — and Dish Network’s purchase of Sprint’s prepaid assets. Following completion of the merger, Dish is set to acquire Sprint’s prepaid businesses and customers, including Boost Mobile, Virgin Mobile, and the Sprint-branded prepaid service; 14 Megahertz (MHz) of Sprint’s nationwide 800 MHz spectrum; and access the new T-Mobile network for seven years, including the ability to serve DISH customers between T-Mobile’s nationwide network and Dish’s new independent 5G broadband network.

Global Data analyst Tammy Parker argues that this closure does not mean that Sprint is breaking its agreement with the Department of Justice that it not lease, assign, transfer, pledge, or otherwise dispose of any of its prepaid assets because it is shifting the customers to Boost. 

Parker said that Virgin Mobile has been a “dwindling brand” in the U.S. for some time and the closure could make life easier for Dish. 

“If the merger closes, having Virgin’s customers already shifted to Boost makes life easier for Dish, if it acquires these assets, because it won’t have to bother doing the heavy lifting to shutter Virgin,” she said. 

“One could argue that this move, combined with Sprint’s ongoing prepaid customer losses, indicates that getting Sprint’s prepaid businesses is not really a huge win for Dish,” Parker said. “I would say getting Sprint’s 8.4 million prepaid subscribers is a nice base from which to start building a wireless business, but just as important, and maybe more important, are the other things that Dish is getting in the merger deal – like Sprint’s 800 MHz spectrum and what seems to be a sweetheart [Mobile Virtual Network Operator] MVNO arrangement with T-Mobile. 

In July 2019, Dish entered the network as a fourth wireless carrier, and committed to the FCC that the company will deploy a facilities-based 5G broadband network capable of serving 70 percent of the U.S. population by June 2023.