Leap Wireless CFO Perley McBride said Leap is not required to purchase additional iPhones from Apple to meet its first year commitment to the company. On Leap's second-quarter earnings conference call, McBride said that because of Leap's efforts to increase its sales of the iPhone, the company does not have to purchase more iPhones. Leap has a three-year, $900 million deal with Apple for iPhones.
AT&T previously passed on an opportunity to strike a deal with no-contract wireless carrier Leap Wireless but was ultimately the only bidder for the company and wound up paying 58 percent more than it had initially offered, according to a securities filing.
Less than three months after its merger with MetroPCS, T-Mobile US said it has expanded the MetroPCS footprint by 50 million POPs. Along with starting service in 15 new metro areas, T-Mobile also said it is expanding its bring-your-own-device service to all MetroPCS customers.
Cricket provider Leap Wireless unveiled new device financing options to give its subscribers easier access to high-end smartphones. The flat-rate carrier, which AT&T Mobility is seeking to acquire, said the new plans will, for example, let customers buy Samsung Electronics' Galaxy S4 for as low as $25 down and $25 per month in monthly payments.
T-Mobile US struck back hard against AT&T Mobility's "Next" handset upgrade program, arguing that while the plan tries to copy T-Mobile's "Jump" upgrade program, AT&T is essentially making customers pay for their phones twice with Next.
Now that financial analysts have had some time to digest AT&T Mobility's proposed acquisition of Leap Wireless, many believe AT&T may be overpaying for the no-contract carrier and its spectrum.
The fate of the regional operator is in question in light of the recent consolidation in the U.S. wireless industry. Research firm iGR estimates that the number of subscribers serviced by regional operators has dwindled from 22.2 million in 2012 to 12.5 million today. And with AT&T Mobility's planned $1.2 billion acquisition of Leap Wireless, that number will likely drop to 8 million or fewer by the end of 2013.
In the wake of AT&T Mobility's $1.2 billion acquisition of Leap Wireless, the fate of the company's newly launched Aio prepaid brand is uncertain. AT&T has said it plans to keep Leap's Cricket brand and offer Cricket customers access to AT&T's network. Aio launched in May with the goal of targeting those same prepaid customers.
AT&T's purchase of Leap Wireless for $15 per share, or about $1.19 billion, and its integration of that company's PCS and AWS band spectrum, covering 137 million people, into its existing spectrum licenses will be a major cog in Project Velocity IP (Project VIP), the carrier's multibillion-dollar wireless/wireline expansion of U-verse.
AT&T's plan to take over prepaid wireless operator Leap Wireless is primarily about gaining much needed spectrum for mobile broadband services.