Leap to hold off on LTE devices until 2012

Flat-rate Cricket provider Leap Wireless (NASDAQ:LEAP) will launch its first LTE markets in the second half of this year, but it will not launch LTE devices until the prices drop, the company's CEO said.

In an interview with Mobile Business Briefing, Leap CEO Doug Hutcheson said the company will launch LTE service this year to enhance its EV-DO data service on its CDMA network. However, Hutcheson said he thinks it will take some time for Leap to ramp up its LTE business with consumer-facing devices.

"We think devices will really hit critical pricing in the second half of 2012," he said. "We think 3G, as blasé as that might seem, with the pricing that you'll see on devices, is actually going to be a focus for a few more quarters."

Leap's strategy is simliar to competitor MetroPCS (NASDAQ:PCS), which has deployed LTE in 14 markets. MetroPCS CEO Roger Linquist said in February that the company does not expect to sell meaningful LTE smartphone volumes until 2012.

Leap also signed an LTE roaming deal with wholesale LTE provider LightSquared in March. The deal will allow Leap's LTE subscribers to roam onto LightSquared's network, which is scheduled to launch sometime in the third quarter.

Hutcheson indicated the deal makes sense for Leap. "We certainly have spectrum in most of our markets to launch LTE and to the degree that we can see cost advantages and scale advantages," he said. "We'll continue to do what we do best, which is operate some of the lowest-cost, most efficient networks, and we'll continue that with 4G. But the reality is that working with others on this also makes sense. "

Hutcheson also said that Leap will expand its retail distribution through company-owned stores and branded dealer partners by 500 to 1,000 total stores across the country this year. He also hinted at more partnerships with national, big-box retailers. "We think we have a lot of additional penetration opportunity," he said.

For more:
- see this Mobile Business Briefing article
- see this Mobile World Live video

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