Leap Wireless reported a wider-than-expected loss in the fourth quarter, but saw subscriber growth pick up compared with the third quarter. The company said it is confident that it will see improved long-term performance because of lower churn in its newer markets, refreshed plans, lower unemployment levels among its customers base and--perhaps most interestingly--interest in its new smartphones. Without divulging many details, the flat-rate carrier said it plans to launch later this year a BlackBerry device from Research In Motion as well as a smartphone running Google's Android platform.
The move would follow rivals including MetroPCS and Boost Mobile, which have recently introduced smartphones.
Here's a breakdown of some of Leap's key quarterly metrics:
Subscribers: Leap had net subscriber additions of around 298,000, up from 116,000 in the third quarter, but down almost 23 percent from the 385,000 it had in the fourth quarter of 2008. Leap had 102,000 net voice additions in its older markets, around 127,000 net voice additions in its expansion markets (those that launched from 2008 on), and also 69,000 net broadband additions. Leap ended the quarter with 4.95 million total subscribers, up by more than 1 million subscribers from the end of 2008.
Financials: The company's total revenue came in at $599.3 million, up 15.5 percent from $518.9 million in the year-ago period. Service revenues were $547 million, up 19.3 percent from $458.5 million in the fourth quarter of 2008. The carrier reported a net loss of $64 million in the fourth quarter, wider than a year-ago loss of $54.6 million.
Churn: Churn was 4.7 percent, a sharp jump from 3.8 percent in the year-ago quarter, but down from 5.4 percent from the third quarter of 2009. The company said the year-over-year increase in churn was due to increased competition, the effect of newer customers in its expansion markets and higher unemployment. Leap CEO Doug Hutcheson said in a statement that the company expects churn to remain higher than historical levels in the near term.
ARPU: Average revenue per user was $38.66, down 8.9 percent from $42.44 in the year-ago quarter. Leap said that the drop was primarily due to price cuts the company made in the third quarter, the continued growth of its lower-priced Cricket Broadband and Cricket PAYGo products and higher churn.
- see this release
- see this Reuters article
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