Leap Preps for Session-Based Pricing

Leap Wireless International Inc. (Nasdaq: LEAP) was among the first wireless operators in the U.S. to nix unlimited for tiered data plans, and its CEO says session-based pricing will be the next billing shakeup. (See Leap Revamps Prepaid With Tiered Data.)

Leap first began capping data -- slowing speeds when the max was reached -- in March 2010, President and CEO Doug Hutcheson reminded investors at the Citigroup conference Thursday. Now much of the rest of the industry is adopting this model as well, but the small carrier is already prepping for the next step -- session-based pricing.

Hutcheson said the idea is to add more rate-plan flexibility, which could include offering the ability to buy data sessions or accelerate the speeds at certain times. The options will be straightforward, and accessible directly from the device, he said.

"Our hallmark is our low-cost structure," Hutcheson said, noting that Leap has to craft plans that allow it to remain cost-effective. Its plans range from $35 to $70 per month, which, he stressed, is much less than most of its larger competitors.

In a separate announcement, Leap said Thursday it added 175,000 customers during the fourth quarter of 2011, and 413,000 for the year, bringing its subscriber base to 5.9 million. Overall, its fourth-quarter results barely beat expectations, but analysts were encouraged that 60 percent of its sales were for smartphones and Muve Music devices, which are also providing a boost to Leap's data business.

"Strong smartphone sales should create long-term value as smartphone ARPU is $15/month higher than feature phones," Mizuho Securities USA Inc. analyst Michael Nelson wrote in a research note.

— Sarah Reedy, Senior Reporter, Light Reading Mobile