AT&T announced last week they intend to buy Leap Wireless for around $1.2 billion, or around $15 per share in cash. Leap Wireless provides wireless services through its subsidiary, Cricket Wireless. The Company reported approximately 5,203,747 wireless customers in the first quarter of 2013.
AT&T’s $1.2 billion offer for Leap – the seventh-largest mobile operator in the US according to GSMA Intelligence – follows SoftBank’s recent takeover of Sprint, and T-Mobile’s buyout of MetroPCS in April.
AT&T says they will retain Leap’s Cricket prepaid brand, and use Leap’s PCS and AWS frequencies, which AT&T says cover 137 million people and is “largely complementary to AT&T’s existing spectrum licenses.”
In August 2010, Cricket and Sprint signed a five year wholesale agreement (MVNO) whereby Cricket utilized Sprint’s 3G network throughout the U.S. Leap Wireless (Cricket) made commitments to deliver minimum levels of revenues to Sprint. Sprint and Cricket both currently uses CDMA technology for 3G, rather than AT&T’s GSM system. AT&T also has largely forfeited much of its AWS band (1.7/2.1 GHz) holdings.
Leap and MetroPCS were once considered likely partners because of their similar focus on no-contract customers and their complimentary coverage. Leap (Cricket) picked up 100 licenses in the FCC’s Advanced Wireless Services auction (AWS) at an aggregate cost of $984 million. Their regional AWS coverage largely compliments that of MetroPCS.
Mosaik Solutions’ map shows the combined spectrum holdings of AT&T and Leap. The main component of the deal is Leap’s 1.9 GHz and 1.7/2.1 GHz spectrum licenses covering approximately 137 million potential customers.
An AT&T purchase of Cricket would deny T-Mobile from accessing the potential synergy of a combined Leap/MetroPCS, even though the carrier may not be a good operational match for AT&T. MetroPCS and T-Mobile USA completed their merger earlier this year.
MetroPCS selected Ericsson and Samsung as vendors for its LTE network, which was actually the first LTE network available in the United States.
The combined T-Mobile and MetroPCS will have 76 MHz of total spectrum in the top 25 major metro areas, reports Fierce Wireless. The combined company will count 60,000 cell sites and distributed antenna network nodes, resulting in around 765 subscribers per cell site. T-Mobile has said it will consolidate MetroPCS’ network in certain areas by decommissioning unneeded sites.
T-Mobile USA CEO John Legere hinted at a new prepaid offering that will target Cricket’s prepaid customer base. In addition, he said he is ‘intrigued’ by Dish Network’s vision of combining the company with a wireless carrier, but added that the two companies aren’t talking, reports Fierce Wireless.
Related Dailywireless articles include; T-Mobile & Leap Wireless Do Spectrum Swap, MetroPCS Merges with T-Mobile USA, Leap Wireless Announces LTE, Leap Wireless Sale? T-Mobile to Pay More for MetroPCS, T-Mobile/MetroPCS Merger Okayed by FCC, T-Mobile/MetroPCS Merger: Okay By DOJ, MetroPCS Merges with T-Mobile USA,