AT&T to shutter Aio Wireless prepaid brand if Leap acquisition is successful
AT&T Mobility (NYSE:T) plans to close its new Aio Wireless prepaid brand if the carrier is successful in acquiring regional prepaid wireless operator Leap Wireless (NASDAQ:LEAP), which offers service through the Cricket brand.
"After the transaction's close, AT&T intends to combine the nascent operations of Aio with Leap's existing operations under the Cricket brand name," AT&T said in a recent FCC filing.
An AT&T spokesperson declined to comment beyond AT&T's filings with the FCC.
AT&T launched Aio Wireless in May in a few markets across the country, and then took the offering nationwide last month. Aio currently has more than 230 stores so far in Texas, Florida and Georgia, which are operated by independent dealers. The prepaid brand offers feature phones and smartphones and pricing options ranging from $40 per month to $70 per month. The service is positioned as a response to the likes of Sprint's (NYSE:S) Boost Mobile and Virgin Mobile brands as well as MetroPCS and other prepaid services. AT&T had planned to expand Aio's services to 220 million retail POPs by the end of 2016.
However, AT&T announced in July it would acquire Cricket provider Leap for $1.2 billion. AT&T argues the transaction will improve its footing in the prepaid space, and will increase its spectrum holdings. Leap shareholders are scheduled to vote on the transaction Oct. 24. AT&T has said it expects to close the deal sometime this year. Analysts have said they expect regulators to approve the deal.
When AT&T first announced its plans to acquire Leap in July, the carrier said that it had not yet determined what it would do with the Aio prepaid brand. However, in the carrier's Aug. 1 "public interest" filing with the FCC, AT&T said that "Aio still faces significant challenges to establish nationwide retail distribution, build brand recognition, and develop a significant customer base" and that moving forward with Leap's Cricket brand would allow AT&T to more quickly and efficiently target the prepaid space.
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