Cricket Leans on Its Competitors for LTE
Small, prepaid wireless operator Leap Wireless International Inc. (Nasdaq: LEAP) is looking to blanket its footprint with Long Term Evolution (LTE), but it's leaning heavily on other wireless operators to make it happen.
The carrier, which operates under the Cricket Communications Inc. moniker, lost $15.8 million in the first quarter, but it managed to add 258,000 new customers. It gained 220,000 customers from inside its own footprint through retail expansion and 38,000 outside its footprint through its first wholesale partner Sprint Corp. (NYSE: S). (See Cricket Expands Into Target Stores, Cricket Leaps to Nationwide and Leap Hopes Music Will Muve It Nationwide.)
Now, Leap is planning to reach 25 million people with LTE this year, and President and CEO Doug Hutcheson said it's made "three or four spectrum transitions" to expand its depth of footprint in several markets and give it flexibility on how it uses the spectrum it now owns.
The two transactions we know about are with T-Mobile US Inc. and one with Verizon Wireless to swap Advanced Wireless Services (AWS) spectrum in several markets. Giving it the biggest boost, however, is its recently inked five-year wholesale 4G LTE agreement with Clearwire LLC (Nasdaq: CLWR) to replace its pact with LightSquared . (See Leap & T-Mobile to Swap Spectrum for 4G, Verizon, Leap Swap Some Spectrum and Cricket Taps Clearwire for LTE.)
"The LTE rollout is moving forward, costs are under control and early customer feedback has been positive," Hutcheson said on the earnings call, adding that the carrier is also on the look out for other spectrum acquisition opportunities. On its own, Leap only has 23 MHz of spectrum in its operating markets to roll out LTE.
"We have the ability to swap [spectrum], we've done that three or four times, consider if there's appropriate places to acquire and manage that through wholesale agreements," Hutcheson added.
Don't expect the extra capacity to mean unlimited data buckets with LTE, however. Hutcheson said a data model with no guidelines on usage or capacity wouldn't be appropriate for Leap. Tiers and session-based pricing models, which it plans to launch later this year, will be its approach, he said. (See Leap Preps for Session-Based Pricing.)
— Sarah Reedy, Senior Reporter, Light Reading Mobile