MetroPCS, Leap open to scooping up divested AT&T/T-Mobile assets

Executives from flat-rate carriers MetroPCS (NASDAQ:PCS) and Leap Wireless (NASDAQ:LEAP) each said they would consider buying spectrum and other network assets that AT&T (NYSE:T) might be forced to divest as a condition on its proposed $39 billion acquisition of T-Mobile USA. At the same time, the executives said their respective companies are focused on organically growing their businesses, mainly through greater smartphone and data penetration.  

Speaking at the J.P. Morgan Technology, Media and Telecom Conference, MetroPCS CFO Braxton Carter and Leap CFO Walter Berger each said they did not want to speculate on what assets might be divested, but that they were open to pursuing opportunities that made sense for their respective companies.

Carter said MetroPCS is concerned about the spectrum position that AT&T might attain if the deal were to gain regulatory approval, but also said the transaction could produce opportunities. "We believe that there will be some spectrum dispositions coming out," he said. "Some of those opportunities will come with operating markets and subscribers. We will certainly look at all possibilities." Carter said MetroPCS could migrate GSM customers onto its CDMA network if necessary thanks to the advent of new, multi-mode base stations.

Similarly, Berger said Leap would be interested in pursuing divested assets.

Both execs also talked about LightSquared, the wholesale LTE provider that Leap has signed a roaming agreement with. Carter reiterated MetroPCS' interest in working with LightSquared, but gave no indication about the status of negotiations. Berger said Leap also is open to striking a wholesale relationship with other operators. "We'll evaluate a host of opportunities," he said. "And if there are opportunities to do something wholesale that's--in an economic relationship--more rational than building, we'll absolutely do that."

While discussing strategic initiatives, both companies remain focused on building momentum with smartphones and other advanced services, the executives said. Carter said MetroPCS will continue to go after mid-tier postpaid customers who are looking for a strong value proposition. "Even without the merger, T-Mobile has lost their relevance in the middle tier," he said.

Berger also said Leap will expand its advertising and its retail distribution in national, big-box retailers to go after the "value consumer segment" in addition to focusing on its traditional demographics. He also said a key component will be the expansion of the company's Muve unlimited music service to more handsets, including Android smartphones, in the second half of the year.

For more:
- see this Dow Jones Newswires article (sub. req.)
- see this MetroPCS webcast
- see this Leap webcast

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