Paul Keating set for $40 million windfall from Telstra deal

Paul Keating has emerged as a significant winner from the sale of Boost Mobile, with the former prime minister set to pocket at least $40 million from the telco tie-up.

Telstra on Monday announced it would acquire Boost Mobile in a deal understood to be worth just under $140 million in cash, a move that will enable Telstra to spruik low-cost prepaid plans amid an ongoing cost-of-living crunch.

Former prime minister Paul Keating was the initial funder of Boost Mobile.Credit: Louie Douvis

Keating holds a 29 per cent stake in Boost Mobile and remains one of the company’s largest shareholders. He was the sole investor when he co-founded the business in 2000 with entrepreneur Peter Adderton, who retains a 32 per cent stake.

Other shareholders include skateboarder Peter Hill and his brother Stephen Hill, as well as former Boost Mobile chief executive Paul O’Neile.

The acquisition, expected to be completed this month, will see Boost Mobile employees integrated into Telstra and no changes for Boost’s thousands of prepaid customers.

The companies had been partnered for 13 years, with Telstra responsible for most of the operational parts of Boost’s business, including network access and customer service, while Boost was responsible for branding and marketing.

“Boost Mobile has been a fantastic partner of Telstra, this acquisition cements just how much we value the Boost brand,” Telstra executive Brad Whitcomb said.

“We know Boost branded products are a fantastic option for those seeking more affordable mobile connectivity, and we are committed to providing that choice in the market.”

Boost Mobile chairman Peter Adderton, who owned about a third of the company he founded in 2000, said the acquisition was a natural evolution for his brand, which typically targets younger customers.

“I am excited to see how the brand will continue to grow under Telstra’s ownership,” he said. “The team at Boost are the best in the business and I wish them all well on the next part of Boost Mobile’s journey.”

Boost Mobile chief executive Jason Haynes, a former professional snowboarder, said he would leave the business after it was integrated into Telstra.

Adderton has previously praised his business partner Keating as a “great marketer”.

Keating poured an initial $500,000 into the business and helped Boost Mobile negotiate an agreement with Optus, its first partner.

“I’ve got a chunk of a successful business which I co-founded and funded myself,” Keating told The Australian Financial Review. “I’m reasonable at my own ventures.”

Boost Mobile chairman Peter Adderton owns about a third of the company he founded with Keating in 2000.

Adderton is now based in the US and is running a new telco venture, MobileX. Last year, he won a Federal Court stoush against Telstra rival Optus after Optus launched “Internet Boost and Mobile Boost” products, which allowed customers to pay a fee to improve their broadband and mobile speeds.

Optus has since renamed those products Internet and Mobile Turbocharge.

In an interview at the time, Adderton, who has gained a reputation in the telecommunications industry for his outspoken views, said American telcos “beat each other up” and that competition in Australia was “lame” by comparison.

“When it comes to corporate Australia, everyone is very soft,” he told this masthead. “We want to fight hard and call people out when they make mistakes, and more importantly, we’ll call ourselves out if we make a mistake. This is a combat sport, and Australia needs to wake up a little bit and fight a bit harder to show that you’re fighting for your customers.

“We have a very ‘woke’ moment right now in corporate Australia where consultants are telling people what they should and shouldn’t say, and what ends up happening is you end up saying nothing. You’ll never offend anybody if you’re fighting for your customers, never.”

The Business Briefing newsletter delivers major stories, exclusive coverage and expert opinion. Sign up to get it every weekday morning.