T-Mobile gets Mint Mobile, Reynolds and all
T-Mobile last week announced that it plans to acquire the Ryan Reynolds-backed Ka’ena Corporation, which owns the popular Mint Mobile, Ultra Mobile and Plum (a wholesale wireless solutions platform) for a maximum fee of $1.35 billion depending, on Ka’ena’s performance during the acquisition period. Here is a quick take on the impact of this merger on the U.S. mobile landscape.
The Circana Take:
- How big is Mint Mobile? Given Ka’ena is a private company, there is no official word on the installed base of Mint Mobile. Circana’s latest Mobile Connectivity survey depicts that the brand has a 1.1% installed base share, which equates to close to 3 million subscribers, thus allowing T-Mobile to retake the lead in the prepaid space from Verizon.
- How did Mint Mobile grow so fast? There are two quick answers: “Ryan Reynolds” and “sales at loss.” Mint Mobile’s latest device and service bundles. For instance, new Mint Mobile customers were offered a Google Pixel 7 bundled with 12-month of unlimited data only for $379. Considering the phone’s $599 MSRP, it is safe to assume that Mint Mobile has ingeniously been setting up itself for acquisition.
- “The Un-carrier will also be able to leverage Mint’s industry-leading digital D2C marketing expertise as part of its broader portfolio to reach new customer segments and geographies.” The above line is from T-Mobile’s press release about the acquisition. If we were to summarize it in five words, it would read “We have got Ryan Reynolds” as Mint Mobile is simply a marketing miracle.
- As we have commented many times in our periodical market update presentations, the marketing charm of Ryan Reynolds has transformed Mint Mobile into an aspirational wireless brand with further growth potential, given his rating among future consumers (aka, U.S. teenagers). Ryan Reynolds, who trailed behind Adam Sandler in investment banker Piper Sandler’s bi-annual teenager survey in 2H 2021, took over the lead from him to become U.S. teenagers’ top celebrity in 2022. The inclusion of Ryan Reynolds in Mint’s ongoing and future marketing should help T-Mobile further grow its leading position in prepaid in the years to come.
- Mint Mobile is one of the leading prepaid brands in Net Promoter Score (NPS – 46 points), again thanks to Ryan Reynold’s marketing charm and the brand’s competitive pricing. In contrast, T-Mobile’s main prepaid arms Metro by T-Mobile and T-Mobile Prepaid had NPS of 34 and 29 points, respectively at the end of 1H 2022. If Mint Mobile can retain its aggressive service pricing, the Metro brand may experience minor cannibalization, but T-Mobile would and should take this ARPU-drop scenario over losing the subscriber to a rival offering outside the network.
- Mint Mobile’s service price scheme is based on multi-month offers that locks the prepaid users in for longer periods (3-, 6- and 12-month options). These low-cost multi-month plans should be attractive for the price-sensitive prepaid community dealing with the economic headwinds rising the cost of living. In fact, Circana’s latest Mobile Connectivity survey reveals that 44% of prepaid customers are either “very” or “extremely” interested in signing up for a multi-month prepaid plan in return for additional discounts.
Now what?
T-Mobile has made it clear that the Mint brand will run independently, though we would not be surprised to see a branding umbrella strategy similar to what the Uncarrier did with the Metro brand and rebrand the MVNO as “Mint by T-Mobile” following the acquisition. As T-Mobile mentioned in its press release, Mint Mobile will enjoy the scale and the owner economics of its parent, though customers should not expect to see unrealistic offers such as the Google Pixel 7 bundle. Oh, and we really have no idea how Ryan Reynold will spend the profits made by the sales of Mint Mobile, but it would sure be great to see his Wrexham FC venture getting a piece of the action.