Leap Wireless (NASDAQ:LEAP) reported a wider net loss in the first quarter. Though its net subscriber additions for its Cricket-branded service remained relatively stable, the company saw its average revenue per user drop significantly.
The flat-rate carrier, which recently expanded its service nationwide through enhanced roaming agreements, reported a net loss of $65.4 million, wider than the $47.4 million net loss it had in the year-ago quarter. In a statement, Leap CEO Doug Hutcheson promised Leap's new markets and its broadband service would eventually pay off.
Here's a breakdown of Leap's key metrics:
Subscribers: Leap reported 446,000 total net subscriber additions in the quarter, down 9.5 percent from the 492,000 it had in the year-ago quarter. The company had around 249,000 net voice additions and 197,000 net broadband additions in the period. Leap ended the quarter with 5.4 million total subscribers, up 24.5 percent from the 4.3 million it had in the first quarter of 2009. The company also started experimenting with market trials for three new unlimited prepaid mobile broadband plans, which it may roll out later this year.
Revenue: Leap reported total revenue of $654 million in the quarter, up 11.4 percent from $587 million in the year-ago quarter. Service revenue came in at $585 million, a 13.8 percent jump from the $514 million it clocked in the first quarter of 2009.
Churn: Churn was 4.5 percent, up from 3.3 percent for the first quarter of 2009, but down from 4.7 percent for the fourth quarter. Leap said that the year-over-year increase reflected the impact of customer tenure in its markets launched in 2009 as well as competitive challenges. Like its main competitor, MetroPCS (NASDAQ: PCS), Leap will soon have to contend with with Sprint Nextel's (NYSE: S) newly unveiled plans to relaunch the Virgin Mobile brand as well as a new brand focused on the pay-per-minute market.
ARPU: Average revenue per user was $37.96, down a sharp 10.1 percent from $42.21 in the year-ago quarter. The carrier said that the drop was due to more customers signing up for Cricket Broadband and Cricket PAYGo services, which are generally priced lower than its flat-rate wireless service.
For more:
- see this release
- see this FierceWireless Q1 earnings page
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