Sprint and Open Mobile officially confirmed an agreement to combine their businesses in Puerto Rico, together with Sprint’s business in the U.S. Virgin Islands, into a new joint venture.
This media outlet reported this transaction was near completion in late January.
The joint venture between two of the five players in the Puerto Rico wireless market will create a “stronger competitor offering postpaid, prepaid, Lifeline and business services with increased scale, expanded distribution, improved network capacity, faster speed, and a deeper spectrum position,” the companies said in a statement issued Thursday.
Sprint and Open Mobile will have a 68 percent and a 32 percent economic interest, and a 55 percent and 45 percent voting interest in the joint venture, respectively. Evercore served as financial advisor to Open Mobile on the transaction.
“The combination of Sprint and Open Mobile will put us in a better position for sustainable growth and long-term success in the competitive Puerto Rico market,” said Claudio Hidalgo, Sprint’s Regional President for Florida, Puerto Rico and the USVI.
“We will be able to more efficiently and effectively run the joint venture by integrating our strong employee teams, retail operations, and network and spectrum assets to create an improved mobile experience for our customers,” he said.
No action is required by existing Open Mobile, Sprint, Boost Mobile, or Virgin Mobile customers at this time, and they can remain on their existing devices and service plans, company officials said.
“All customers in Puerto Rico and the USVI can expect a smooth transition, and additional information will be provided to all customers when the transaction closes,” the companies said in the statement.
The joint venture calls for establishing a new board of directors, with Open Mobile and Sprint each designating representatives. A senior management team, to be named by the Board prior to closing, will manage day-to-day operations of the joint venture out of Puerto Rico. It is not clear yet whether current company executives — Patricia Eaves at Sprint and Juan Saca at Open Mobile — will remain in their posts or with the companies in different capacities.
“Looking at each company and our strengths in various segments of the market, we saw an incredible opportunity to join forces in a way that will benefit our customers, our employees and our business,” said Juan Saca, CEO of Open Mobile.
“Our employees will be able to offer customers more competitive plans and better wireless coverage, with Open Mobile customers having a wider variety of devices to choose from and plans that include nationwide coverage and options for international roaming,” he said.
Both companies will continue to operate separately in the market under their current brands until the transaction closes. The transaction close is subject to review and approval by the Federal Communications Commission, along with other regulatory authorities, which is expected to take several months.