Friday, July 12, 2013

AT&T to Buy Leap Wireless

AT&T is buying Leap Wireless, including its five million subscribers, the Cricket brand and spectrum, network and retail assets, though the deal is subject to regulatory approval.

Leap's network covers 96 million people in 35 U.S. states, most of whom use Leap’s CDMA 3G network. But Leap also has a 4G Long Term Evolution network covering 21 million people.

AT&T says it will retain the Cricket brand name, provide Cricket customers with access to AT&T's 4G LTE mobile network, use Cricket's distribution channels and expand Cricket's presence to additional U.S. cities.

The move arguably offers the primary advantage of a new platform to gain share in the prepaid market.

But the proposed acquisition also includes spectrum in the PCS and AWS bands covering 137 million people and is largely complementary to AT&T's existing spectrum licenses.

AT&T says that Immediately after approval of the transaction, AT&T plans to add Leap's unutilized spectrum, covering 41 million people, to AT&T’s LTE network.

Regulatory approval might take as long as nine months, if past precedent applies. The deal would not change U.S. market share in a material way, one might argue. Leap Wireless has market share of less than two percent, and lower average revenue per user than typically is the case for a postpaid service provider.

EE in the United Kingdom typically sees postepaid average revenue per user that is as much as six times the value of a prepaid account.




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