Leap suggests its LTE roaming deal is with Sprint, hints at more device financing options

LAS VEGAS--Executives from Cricket provider Leap Wireless (NASDAQ:LEAP) strongly hinted that the company's LTE roaming deal is with Sprint Nextel (NYSE:S), which already has a nationwide 3G CDMA roaming deal with Cricket. 

In a briefing with reporters here at the CTIA Wireless 2013 conference, Leap executives also disclosed details about the company's device portfolio, a new Cricket advertising campaign specifically targeting AT&T Mobility (NYSE:T) and Verizon Wireless (NYSE:VZ) and also announced the upcoming availability of Samsung Electronics' flagship galaxy S4 smartphone. Cricket said the Galaxy S4 will be available at Cricket company-owned stores, dealers and online starting June 7 for $599.99, and qualifying customers can put $54.99 down at purchase and make monthly payments.

Matt Stoiber, Cricket's senior vice president of devices, said that the S4 will support LTE and LTE roaming in the AWS Band 4 as well as Band 25. T-Mobile US (NYSE:TMUS) is among the carriers that support LTE in Band 4. Sprint uses Band 25 for its existing LTE network on its 1900 MHz spectrum, and Stoiber suggested the S4 will use that network. "We will enable roaming on Band 25 this summer," he said, adding that customers "can roam nationally and use LTE in Band 25." He and other Cricket executives declined to name Sprint as the company's LTE roaming partner; Cricket initially announced the agreement in February. Stoiber said Cricket may look to add support for additional bands in its devices with companies that it has deals with now and with other carriers.

Stoiber also said that Cricket will launch new device financing options for customers in the middle for the summer that range from customers with subprime credit to prime. He said Cricket is focused on giving its customers the ability to purchase higher-priced phones and that the new financing options, which he declined to detail, will "continue growth for us in the higher tier devices." He suggested that customers with strong credit will pay little to no interest on the financing plans.

Late last year Cricket started working with Progressive Finance on device financing plans. Cricket customers who purchase more than $200 worth of hardware (phones and accessories) can apply for a Progressive Finance loan at a Cricket store or dealer via an online application.

Despite the focus on high-end phones, Stoiber said feature phones still account for a third of the total handset volumes Cricket sells, and certain customers will never want to upgrade to a smartphone because of the price of the phone, data plan and because they prefer a simpler communication experience.

Stoiber said that the company is still seeing a large volume of entry-level Android smartphone sales and more high-end sales than it had expected. The middle-tier smartphone segment isn't performing as well, he said. Cricket plans to introduce more Samsung devices this summer, including the entry-level Galaxy Discover and the LTE-capable Samsung Admire II.

This year, he said, Cricket will support a narrower range of OEM partners, but it is not foreclosing working with any company it has worked with in the past and is also looking at new partners. He said the carrier is "trying to hit doubles, triples, home runs with volume" and does not want to support devices that will only move minimal numbers of shipments.

Leap CEO Doug Hutcheson said that a year ago around 1 percent of Cricket's smartphone sales were high-end smartphones, a figure that is now in the mid-teens and growing. Although Cricket has focused on Android, Stoiber said the carrier is open to using Microsoft's (NASDAQ:MSFT) Windows Phone 8, which he said "is turning out to be a really stable platform" that is "gaining momentum." He said  "we're very interested in it" and though he did not give a timeframe for when Cricket might support a Windows Phone device, he said it would likely be a high-end gadget. Stoiber also said Cricket continues to talk with BlackBerry (NASDAQ:BBRY) but has not made any commitments to supporting BlackBerry 10 devices. 

In discussing the new advertising campaign targeting AT&T and Verizon, Tyler Wallis, senior vice president of product and marketing, said that Cricket hears a great deal from postpaid customers who switch and say they were fed up with the pricing or experience on postpaid service. The new campaign, dubbed "Half is More," focuses on the fact that the average Cricket single-line smartphone plan is about half the price of a comparable plan at AT&T and Verizon. The campaign is rolling out now across digital, print, retail, out-of-home and social media, with television advertising beginning June 3, and it will feature real-world "advertisements" that demonstrate the price difference between the plans.

"The point of this campaign is that with the money you're saving at Cricket you can do more that's important to you in your life," Wallis said.

When asked about T-Mobile US' (NYSE:TMUS) plans to significantly expand the footprint where its MetroPCS brand offers service by around 100 million POPs over the next six quarters, Hutcheson said Cricket is not that worried. He said Cricket has experienced such expansions before and has fared well historically. "We don't lack competition in the prepaid segment," he said, noting that Cricket is focused on capturing a larger slice of what it expects will be an expanding pie of prepaid customers.

Cricket thinks 50 million U.S. subscribers will consider switching this year from postpaid to prepaid plans, two-third of which will be from AT&T and Verizon. Hutcheson said Cricket will focus on continuing to improve its Muve Music service and also hinted that late this year or early next year the company will launch "a fairly large product evolution" focused on mobile content. He declined to go into further details.

For more:
- see this Cricket release
- see this separate Cricket/Samsung release

Special Report: Visit CTIALive for complete CTIA Wireless 2013 coverage

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Unsubsidized iPhones not appealing to consumers
Cricket spinning off Muve Music, will license service to rival operators
Leap strikes LTE roaming deal with unnamed carrier
Leap: Advanced smartphones prompting business model changes

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