Sprint Nextel Corp. on Tuesday said it had completed its $483 million acquisition of Virgin Mobile USA, boosting its presence in the market for customers who pay for cell phone service month-to-month.
Virgin Mobile shareholders earlier Tuesday voted in favor of the acquisition, which was announced in July and pays them $5.50 in Sprint stock for each Virgin Mobile share. The deal also includes retiring roughly $223 million of Virgin Mobile's debt.
Sprint Nextel already owned 13.1 percent of Virgin Mobile, which uses Sprint's network to offer service and has 5.2 million subscribers.
Like other so-called "prepaid" vendors, Virgin Mobile primarily appeals to customers who lack the credit or income to qualify for long-term contracts or simply want a bargain over contract-based plans.
The market for these customers has expanded as the economy has forced more traditional wireless customers to search for cheaper plans. Sprint, which is based in Overland Park, Kan., ignited a mini-price war in January when it introduced a $50-per-month prepaid unlimited plan under its Boost Mobile brand.
It's unclear how Virgin and Boost will coexist under Sprint, although they have been geared toward different markets _ Virgin aimed at teens and 20-somethings while Boost is considered a value brand. The company said customers of both brands won't see any immediate changes.
Other competitors in the prepaid space include No. 4 carrier T-Mobile USA and smaller upstarts like MetroPCS Communications Inc. and Leap Wireless International Inc., which sells under the Cricket brand.
Prepaid carriers are expected to have the most growth potential as most people who want wireless service in the U.S. and are eligible for a contracts have a phone already.
Virgin Mobile shareholders, which include British billionaire Richard Branson's Virgin Group and South Korean carrier SK Telecom, will own about 3 percent of Sprint.
Sprint shares lost 15 cents, or 3.9 percent, to close Tuesday at $3.75.