Leap targets Virgin, others with low-end $30 mobile broadband plan
Cricket provider Leap Wireless (NASDAQ:LEAP) refreshed its mobile broadband pricing by giving high-end customers more data and introducing a cheaper mobile broadband plan starting at $30 per month.
According to Cricket's website and a report from research firm Current Analysis, the flat-rate prepaid carrier introduced a $65 per month plan with 8 GB of data, up from 7.5 GB previously. Leap also launched a new, low-end $30 plan with 2 GB of data (previously it offered 2.5 GB for $45) and is offering a $45 plan with 4 GB of data (previously $50 for 5 GB). So far, the plans do not work with Leap's nascent LTE service, which the company has pledged to expand to 20-25 million POPs by the end of this year; Leap says mobile broadband customers can expect speeds of around 1.4 Mbps.
For more than a year Leap has been working to winnow the number of mobile broadband customers it has in favor of smartphone users and offerings such as its Muve Music service. Leap spokesman Greg Lund confirmed the pricing changes but told FierceWireless that "there's been no change in strategy regarding broadband. These changes were made as part of our ongoing network management."
The changes, especially the low-end $30 plan, could help Leap better compete with the likes of Sprint Nextel's (NYSE:S) Virgin Mobile brand, since previously Leap's cheapest prepaid mobile broadband plan started at $45 per month. In a report on the new plans, Current Analysis analyst Deepa Karthikeyan wrote that the new plans are mostly a positive move for Leap since it "needed to react to the rapid changes taking place in the ultra-competitive prepaid market to remain relevant."
"While Leap can be credited for popularizing the concepts of prepaid broadband and throttling data speeds instead of charging overages to users, the carrier lost momentum to providers like Virgin Mobile who began offering 4G solutions to users with aggressive plan options and to those offering trendy device choices such as the iPad offered by Tier 1 carriers like Verizon Wireless (NYSE:VZ) and AT&T (NYSE:T)," she wrote. "Leap's new portfolio offers cost effective options and will now cater to a wider segment of users via plans that offer data speeds from 2 GB to 8 GB which should help the carrier regain its position as a leading prepaid broadband services provider."
In a separate announcement from Leap, the company disclosed in a regulatory filing that COO Raymond Roman has received a separation package from the company and will leave Leap. Lund declined to comment on why Roman is leaving, but said it was "a mutually agreed upon departure." Roman, who joined Leap in February 2011, will receive a $495,000 payment when he leaves, effective July 31.
"We do not currently have any plans to replace him," Lund said. "The areas of the business that he oversaw (supply chain management, devices, enterprise program management, our LTE initiative, product marketing and improving the Cricket customer experience) will be divided up among other members of our executive leadership team."
- see this Cricket site
- see this SEC filing
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