With the acquisition, Ergen will control wireless services Boost Mobile and MobileX through EchoStar and a SPAC, respectively
By Patience Haggin
Charlie Ergen has reached a deal to acquire a controlling stake in wireless-service provider MobileX through his special purpose acquisition company CONX, according to people familiar with the matter.
The deal, which would require regulatory approval, values MobileX at about $200 million, the people said.
Ergen is the co-founder and chairman of EchoStar, a holding company for his communications empire. The company's portfolio includes wireless brand Boost Mobile and pay-TV business Dish Network.
The new deal also gives wireless carrier Verizon Communications a minority stake in MobileX by converting a loan into equity, the people said. MobileX has leased and resold excess capacity from Verizon's network for years.
It wasn't immediately clear how or if Ergen plans to coordinate or combine the operations of MobileX and Boost Mobile.
Peter Adderton will remain chief executive of MobileX, said some of the people familiar with the matter. Adderton founded Boost Mobile in 2000 and sold it to Nextel in 2003. The company changed hands a few times and has been owned by EchoStar since 2023. Adderton founded MobileX in 2019.
EchoStar has lost money on wireless services for years, and Adderton has taken to social media to criticize the way it runs Boost Mobile.
"We haven't cracked the code on how to be successful to the level we'd like to in the wireless business," Ergen said on an earnings call earlier this month. "We've treaded water for four years now."
He said that strategic initiatives would reinvigorate the business.
Ergen gave up on a $46 billion effort to build a nationwide 5G competitor to industry leaders AT&T, T-Mobile US and Verizon last year after the Federal Communications Commission complained about the initiative's slow progress.
Ergen has put Dish subsidiaries into bankruptcy protection and is positioning EchoStar to emerge with tens of billions of dollars from spectrum sales, including to SpaceX, which has indicated plans to expand into mobile service.
Both MobileX and Boost Mobile remain small carriers relative to AT&T, T-Mobile and Verizon, which together control more than 90% of the market for cellphone service, according to research firm MoffettNathanson.