leap wireless

U.S. Cellular, other small U.S. operators continue to lag behind

Phil Goldstein — Wed, 19 Nov 2008 11:24:52 -0500

When Verizon Wireless' $28.1 billion acquisition of Alltel closes, there will be no U.S. wireless networks with between 7 million and 30 million customers, and the gap between small operators and large behemoths will grow wider, according to a report by the Mobile World Briefing.

There are currently seven networks with fewer than 7 million subscribers but greater than 250,000, although if AT&T's plan to buy Centennial gains regulatory approval, there will only be six. They include Qwest, Ntelos, U.S. Cellular, Leap, MetroPCS and Cincinnati Bell. During the third quarter, four out of the seven experienced net declines in subscriber growth, with Qwest experiencing the largest drop. Qwest lost 45,000 subscribers in the quarter, taking its base down to 770,000, its lowest base since the third quarter of 2005.

Leap and MetroPCS remain the fastest-growing small operators, with annual growth rates of 27.6 percent and 32.3 percent respectively. However, the annual growth rate for the seven combined was 13.1 percent, compared to 15.9 percent for T-Mobile USA, 14.0 percent for AT&T Mobility, 11.2 percent for Verizon and -6.3 percent for Sprint Nextel.

When the Verizon-Alltel deal closes it will create company with more than 83 million subscribers. AT&T is the second largest, with nearly 75 million subscribers.

For more:
- see this article

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Leap loses money despite customer gains

Jim Barthold — Thu, 06 Nov 2008 08:13:41 -0500

The cost of building out broadband wireless infrastructure is proving to be a heavy burden for Leap Wireless which reported a loss of $48.8 million or 72 cents per share in the third quarter. On a positive note, some analysts saw the carrier losing as much as 57 cents per share. Here's a breakdown of the other key metrics for the quarter:

Revenues: Leap reported 21 percent improvement in revenues which rose to $496.7 million from $409.7 million a year ago. This, too, fell short of analyst expectations of $509.4 million.

Customers: Leap added 156,000 customers in the quarter, mostly for voice services, bringing its total base to 3.5 customers or 800,000 more than a year ago including 40,000 new broadband subscribers. But those broadband customers didn't come cheap. Leap said it lost $49.4 million in operating income to launch new markets and expand mobile broadband service, including its Cricket Wireless Internet service.

Churn: Third quarter churn was 4.2 percent, an improvement from 5.2 percent in the same period last year.

ARPU: Average revenue per user declined 3.5 percent from the prior year to $42.95.

For more:
- see this article
- see this press release

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20. Roger Linquist, Chairman, CEO, MetroPCS

Phil Goldstein — Tue, 14 Oct 2008 09:24:17 -0400

What makes him powerful: Remember when paging was a powerful force in the wireless industry? Roger Linquist certainly does. The long-time wireless veteran founded PageMart Wireless in 1989 and was a founding director of the CTIA.

That wireless industry knowledge came in handy when Linquist founded MetroPCS in 1994. As a flat-rate regional operator, MetroPCS offers innovative no-contract monthly plans that include unlimited long-distance, unlimited text messaging and more. The company's strategy is to launch its service in urban markets where population makes capital deployments more efficient. In April 2007, MetroPCS launched a $1.15 billion IPO.

Although MetroPCS lacks a nationwide footprint, the carrier recently made coverage less of an issue by ending all pending litigation with rival Leap Wireless. At the end of September, the two companies announced they would be entering into a national roaming deal that allows their customers to roam on each other's networks.

While rumors continue to bubble beneath the surface that the two will merge before the end of the year, Linquist has given no indication that such a move is imminent.

Linquist also made a canny move when MetroPCS announced the MetroFlash service in August, which allows customers with CDMA phones from other operators to bring their existing phone over to MetroPCS service and have it "flashed" so that it will work on the network, for a fee of $30.

As traditional operators encroach on MetroPCS' territory with their own flat-rate plans, the competitive landscape is intensifying. Linquist, however, seems to be succeeding in keeping MetroPCS a step ahead of the rest.

Boost Mobile, Cricket simplify rate plans

Sue Marek — Wed, 08 Oct 2008 11:51:08 -0400

With the economy in the tank, consumers may be looking for a cheap and easy wireless deal, and prepaid providers Boost Mobile and Cricket Wireless are looking to capitalize on that trend. Last week Leap Wireless announced that its Cricket service would offer new daily rate plans called PayGo that provide customers with unlimited service for $1, $2 or $3 per day. The $1 plan includes unlimited local calling and voicemail, caller ID and three-way calling. The $2 plan offers the same as the $1 plan plus unlimited text and picture messaging. And the $3 plan adds unlimited U.S. long distance, international texting, mobile Web and directory assistance.

Now comes word from Boost Mobile that it is launching a new flat-rate of 10 cents per minute for all calls, no matter what time of day. The Boost Mobile plan, called Pay As You Go, lets customers pay by the minute without a long-term commitment. Plus they already can get unlimited nationwide push-to-talk service from Boost for a flat-fee of $1 per day.

J.D. Power and Associates' says that subscribers prefer flat-rate plans with unlimited minutes. In the company's annual prepaid wireless customers satisfaction study, the overall satisfaction among U.S. prepaid users is higher among those who subscribe to flat-rate plans with unlimited minutes vs. those who have per-minute pricing plans because of the cost advantages associated with the flat-rate plans.

For more:
- see this release

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Leap, Metro PCS announce roaming deal

Phil Goldstein — Mon, 29 Sep 2008 09:40:59 -0400

Leap Wireless and Metro PCS have inked a national roaming deal that would cover both networks' present and future markets. Plus the two firms have ended all litigation between the two companies, according to a joint statement.

The roaming deal, which has an initial 10-year term, will allow the two regional carriers to provide interoperable service for their customers. The two companies, which were embroiled in merger talks last fall and into the beginning of this year, also announced a spectrum exchange program, with Leap getting 10 MHz of spectrum in Fresno, San Diego, Seattle and other Washington and Oregon markets, and Metro PCS getting 10 MHz in certain markets, including Dallas-Ft. Worth, Shreveport-Bossier City, Lakeland-Winter Haven, Florida and in other North Texas markets.

The deal brings to a head a relationship that was less than cordial last year. Leap rejected Metro PCS's unsolicited $5.5 billion offer last September, and the two were locked in merger talks and speculation for months. FierceWireless predicted in January that the two companies would merge by the end of the year, and while there is no word that such a merger is imminent, this announcement certainly adds a level of closeness between the carriers.

For more:
-see this release

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Big is better in a slumping economy

Jim Barthold — Fri, 19 Sep 2008 10:35:12 -0400

The spiraling economy, while it doesn't favor anyone, will do the least harm to bigger telecommunications players, according to analyst Craig Moffett at Sanford Bernstein. Companies like AT&T and Verizon, while smacked by bad times, can invest in advertising and networks to grab for more market share.

Smaller, less financially stable players are in deep doo-doo. Sprint Nextel lost nearly a third of its stock value over the last fortnight and MetroPCS and Leap Wireless followed suit by losing about 14 percent. Raising more cash to cover operations is becoming a problem for companies that depend on financing, Moffett said, suggesting that Sprint would have a hard time selling off its Nextel business if it needed to raise cash because it would be just as hard for a buyer to find the money to purchase it.

While Verizon President and COO Denny Strigl emphasized his company is "well positioned," AT&T declined to comment any further on its financial position. Hesse, as expected, conceded that Sprint has "been hit harder than some other telecom companies."

For more:
- see this article

Related:
Virgin Mobile loses 111,273 customers in Q2. article:

Leap offers mobile video for $5 per month

Sue Marek — Fri, 29 Aug 2008 11:17:49 -0400

Leap Wireless has added flat-rate mobile video to its content portfolio. For $5 per month, Cricket subscribers can view one- to four-minute streamed video clips on their handsets. The content, which comes from partners GoTV, Fuel, 5280 Mobile and others includes music, sports and animation.

The $5 per month fee included unlimited video and can be added to any Cricket account. Cricket users can also trial the service on select handsets that have a WAP-enabled browser.

For more:
- See this article

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FCC will not revise roaming rules

Sue Marek — Tue, 26 Aug 2008 10:59:24 -0400

The FCC has decided not to revise roaming rules that currently allow a carrier to roam in areas where they own spectrum but have not built a network. The agency had considered a proposal that would have allowed carriers with unused spectrum to continue to have roaming arrangements with other carriers for four years before they had to decide to either use the spectrum or give it back and continue roaming.

The FCC could not agree on how to best implement the proposal and wanted more time to study the rules.

Small operators such as Leap Wireless have become increasingly concerned about roaming since the proposed merger between Alltel and Verizon Wireless was announced in June. Leap has requested the FCC to deny the proposed merger unless rules were implemented to guarantee there was CDMA roaming available for the carrier. Verizon, meanwhile, told the FCC that it had no intention of terminating Alltel's roaming agreement with the smaller operator.

For more:
- See this article

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Leap and others asks FCC to deny Verizon/Alltel merger

Sue Marek — Tue, 12 Aug 2008 11:55:45 -0400

Leap Wireless along with a group of rural carriers and associations including the Rural Telecommunications Group, NTELOS, SouthernLINC Wireless, SpectrumCo, the Organization for the Promotion and Advancement of Small Telecommunications Companies (OPASTCO), Mobi PCS, Revol Wireless, LCW and Denali Spectrum have petitioned the FCC to deny the proposed merger between Verizon Wireless and Alltel.

Leap and the other parties argue that the merger reduces the competitiveness of the wireless industry by eliminating a major regional carrier, exacerbates roaming issues by having fewer major roaming partners (particularly for CDMA carriers), and allows a mega-carrier to increasingly control spectrum.

Leap asks the FCC to do the following before it approves the merger: revise the existing Roaming Order by eliminating home roaming and "in-market" exclusion and initiate a rulemaking on spectrum caps.

For more:
- see this article

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Leap adds 171K new subs

Sue Marek — Tue, 05 Aug 2008 12:03:40 -0400

Leap Wireless added 171,000 net new subscribers in second quarter 2008, bringing its total customer base to 3.3 million. About 44,000 of those new subscribers came from voice services in existing markets, with approximately 116,000 coming from voice services in recently launched markets. The company's total wireless broadband customers hit the 14,000 mark.

Leap had a churn rate of 3.8 percent for the quarter, down from 4.3 percent in the same quarter last year.

On the revenue front, Leap had an income of $14.5 million for the quarter, down from $30.7 million in second quarter 2007. The company blamed the decrease on new initiatives, including the expansion of its service to cover an additional 8 million people, and the launch of wireless Internet service. New markets in the quarter were St. Louis, southern Texas, Las Vegas and Oklahoma City.

Leap's revenue was $475 million, up 19.4 percent from a year ago.

For more:
- see this press release

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MetroPCS will flash existing CDMA handsets

Sue Marek — Thu, 26 Jun 2008 11:55:48 -0400

Flat-rate carrier MetroPCS is offering potential customers a unique proposition--come to MetroPCS and you don't have to buy a new phone because the operator will reflash your existing CDMA handset so it will work on the carrier's network. Of course, this will only work with CDMA handsets, so that means it will primarily benefit customers that have purchased phones from Sprint, Verizon Wireless, Alltel, U.S. Cellular, Leap Wireless or another CDMA operator.

Called MetroFlash, the service will cost customers $30 and then they can get unlimited local, long distance, voicemail and text messaging from MetroPCS for $40 per month (the first month of service is free). MetroFlash is available at all MetroPCS company-owned stores and select authorized dealers in all MetroPCS markets except Las Vegas and Shreveport/Bossier City.

This is probably a smart defensive move for flat-rate carrier MetroPCS. The company is facing increased competition from nationwide operators and MVNOs that have recently launched unlimited airtime packages.

For more:
- see this release

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Cricket comes to St. Louis

Sue Marek — Mon, 09 Jun 2008 12:06:14 -0400

Starting tomorrow, Leap Wireless will begin offering Cricket unlimited wireless service in St. Louis. The coverage area extends from Warrenton, Mo., to Keyesport, Ill., and includes 2.4 million new covered POPs bringing Cricket's national covered POPs to about 6.7 million.

The carrier will launch in St. Louis with nine retail stores and more than 80 authorized dealers. Plans will range in cost from $30 per month to $60 per month.

For more:
- see this release

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Verizon's Alltel acquisition: What are the ramifications?

Sue Marek — Fri, 06 Jun 2008 11:32:03 -0400

Now that analysts and industry pundits have had 24 hours to rehash yesterday's announcement about Verizon's $28.1 billion acquisition of Alltel, there is lots of debate about how this deal will impact the industry and Alltel customers. Here's a roundup of the latest:

Alltel subscribers: Alltel customers are worried about Verizon's commitment to rural coverage and whether the deal will lead to reduced competition in rural markets. They are also concerned about the possible demise of the firm's popular MyCircle's rate plan that lets them have unlimited calling to 5, 10 or 20 numbers for a monthly fee. Alltel CEO Scott Ford says that there will be not rate plan changes right away.

What does this mean for other operators? Most of the speculation surrounds Sprint, which now moves to a more distant third place behind Verizon and AT&T. Some believe Verizon's acquisition of Alltel increases the chance that Sprint will be acquired by Deutsche Telekom. Technology Business Research believes the acquisition of Alltel will place new burdens on AT&T and cause it to search for possible acquisition targets. That may be tough since prospects are limited. Possible acquisition targets would include U.S. Cellular, Centennial, and unlimited local service providers Leap Wireless and MetroPCS.

For more:
- see this AP story
- see this Chicago Tribune story
- read this Sprint Connections story

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Leap rolls out Cricket in Las Vegas

Brian Dolan — Tue, 13 May 2008 12:07:52 -0400

Leap Wireless announced that its Cricket service is now available in Las Vegas. The new network is running on the carrier's AWS spectrum holdings. The carrier recently launched services over AWS spectrum in both Oklahoma City and southern Texas. The Vegas network will span 1,500 square miles and will cover about 2 million pops. While the carrier has three roaming partners for the service, it has not disclosed which carriers won the deal. The network will faciliate all of Cricket's current calling plan offerings plus its PC card unlimited data offering for Las Vegas subscribers.

For more on Leap's offering:
- read this press release

Leap adds 230,000 net subs

Fri, 09 May 2008 06:59:57 -0400

After a one day delay for the results, Leap Wireless reported a net loss of $18.1 million for its first quarter, which is less than the $24.2 million loss it posted in the year ago period. Leap's sales, however, rose 19 percent to $468.4 million, up from $393.4 million. Service revenues also rose to $398.9 million from $321.6 million, but equipment revenue dropped to $69.4 million from $71.7 million. The carrier added 230,000 net new subscribers during the quarter.

For more on Leap's Q1:
- read this AP article

Leap: VZW, AT&T maybe shouldn't bid on D Block

Tue, 15 Apr 2008 06:59:56 -0400

Leap Wireless' SVP and general counsel Robert Irving testified today before the House Subcommittee on Telecommunications and the Internet about Leap's take on the outcome of the 700 MHz auction.

"We have been concerned in recent years with the ever-increasing consolidation of spectrum assets and market share into the hands of the nation's largest wireless carriers, and the consequences that this portends for Leap and other small and mid-sized carriers," Irving said, according to his prepared remarks.

Irving outlined a few lessons learned from the 700 MHz auction:

One disturbing trend in wireless: Two of the largest carriers increased their vast spectrum holdings thanks to the auction. Verizon Wireless and AT&T contributed $16.3 billion of the total $19.6 billion raised during the auction.
Meanwhile, Leap and Alltel won no licenses, while MetroPCS won one license.
The auction provided limited bidding opportunities for small and mid-sized carriers and little headway was made in bringing new entrants into the industry.
The creation of large geographic areas in the C Block made it difficult for smaller and mid-sized carriers to compete.
The complex public/private partnership framework for the D Block, especially the extremely stringent geographic build out requirements, made the spectrum slice highly unattractive.
The FCC should examine whether breaking the D Block into smaller segments makes better sense and whether AT&T or Verizon Wireless should be allowed to bid on it given the large swaths of 700 MHz spectrum those carriers already have.

For more on Irving's remarks:
- take a look at the entire testimony

Huawei announces plans for 700 MHz band

Lynnette Luna — Wed, 02 Apr 2008 19:56:31 -0400

Chinese vendor Huawei Technologies announced its products for the 700 MHz band will become available in the first quarter of 2009 as the vendor makes its big push in the U.S. market.

Huawei said it will provide network solutions for UMTS, CDMA and LTE technologies for the 700 MHz band. Multi-band operation will be supported with concurrent operation in the 700 MHz, 850 MHz, Advanced Wireless Services and 1900 MHz spectrum bands.

Using software defined radios, the base station portfolio will support dual-mode operation for CDMA + LTE and UMTS + LTE technologies, allowing operators to carry out smooth network evolution from UMTS or CDMA to LTE, said Huawei.

In an interview with FierceWireless, Charlie Martin, CTO-Wireless, said Huawei plans to become an aggressive player in the U.S. market. "The U.S. market is very strategic for us," he said. "Our goal is to be the premier vendor in the world. We can't do that without the U.S. We are totally committed to this marketplace."

Martin said its win last summer to deploy CDMA EV-DO networks for Leap Wireless was an important way to get the vendor's foot in the door of the U.S. market. Huawei so far has completed phase one with Leap, deploying three markets. It is now embarking on a bigger deployment in the second phase since the deployment includes Chicago.

Huawei has gained momentum in Europe, inking deals with carriers including Telecom Italia, Vodafone's Spanish unit, China Mobile's Pakistani unit and New Zealand Communications. In January, Huawei won a contract from O2 Germany to install some 8,000 base stations. This is the second contract Huawei has racked up in Germany in as many months; in December T-Mobile International engaged the Chinese firm to provide next generation packet switched core networks infrastructure in five European countries: Germany, the U.K., Austria, the Netherlands and the Czech Republic.

"Our value proposition is high quality and innovation," Martin said. "We are spring boarding off of what we've done in other countries to bring them to the U.S."

Interestingly, Huawei is not targeting WiMAX in the U.S. as it missed out on a deal with Sprint since the vendor hadn't arrived in the U.S. market in time. "We view WiMAX as different from CDMA and LTE in terms of the fact that WiMAX is a good alternative for emerging markets and alternative operators," Martin said.

The U.S. infrastructure market has historically been a difficult one to crack given the fact that infrastructure deals have been largely wrapped up, business cycles are longer and the business development process requires that vendors spend a lot of time marketing their wares, Martin said. But the 700 MHz and AWS bands are providing new opportunity.

"Last year vendors told us it wasn't the right time to talk," Martin said. "Now they want to talk. They aren't guaranteeing anything, but they definitely are ready to talk."

Leap launches Samsung AWS phones

Thu, 27 Mar 2008 07:59:54 -0400

As we predicted in our CTIA Wireless preview issue last week, Leap has announced a couple of Samsung handsets that run on advanced wireless services (AWS) spectrum. Leap subsidiary Cricket Wireless is adding two AWS-capable handsets from Samsung: The MyShot, which retails for $149.99 and the Spex, which will cost $119.99. Each phone is triband and will operate on the AWS band, the PCS band and existing cellular bands.

"As we prepare to launch the first of our AWS markets, we want to ensure that consumers have a choice of mobile devices when they sign up for Cricket's unlimited wireless services. We are pleased to be the first operator to bring CDMA AWS devices to market including the Samsung MyShot and Spex," said Al Moschner, Cricket's EVP and CMO.

For more on Cricket's new phones:
- read this press release

Auction over: Time for Leap-MetroPCS to merge?

Thu, 20 Mar 2008 07:59:58 -0400

Now that the 700 MHz auction is over Leap Wireless and MetroPCS can resume talks about a merger since the FCC's anti-collusion rules are no longer in effect. During the bidding process for the wireless spectrum, participants were not allowed to discuss business propositions or spectrum strategy. Analysts expect the companies to begin talks and eventually work out a deal, according to a report from the AP. FierceWireless predicted at the beginning of the year that the two carriers would renew talks after the auction, too.

MetroPCS placed an unsolicited buyout bid on Leap Wireless last year, but Leap rejected the bid. MetroPCS offered $5.5 billion in stock plus $2 billion in acquired debt for Leap. As the carrier mulled the unsolicited bid, its executives and board members got antsy: First, Leap's CFO Amin Khalifa left the flat-rate carrier. Then, James Dondero, a Leap board member and president of Highland Capital Management resigned effective immediately.

For more on the potential deal:
- read this article from the AP
- check out the backstory to the deal here

Investor raises stake in Leap Wireless

Fri, 14 Mar 2008 07:59:55 -0400

According to a filing with the SEC, the Owl Creek funds have increased their stake in Leap Wireless to 9.1 percent of the carrier. Last month Owl Creek reported owning 7.5 percent of the carrier's shares. The increase in owned shares marked a jump from 5.1 million shares to 6.2 million. The investor noted in the filing that it had no plans to gain control of the company, but it did express a desire to talk to Leap's management about maximizing longterm shareholder value.

For more on Leap's investors:
- read this article from the AP