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Leap has terrible 2nd Quarter. Won't make payment due to Sprint.


marioc21
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Leap wireless, which sells prepaid service under the Cricket name, reported it's 2nd quarter financials yesterday. The results were not good. Leap lost 289,000 customers, had a net loss of $41 million and is limiting retail expansion plans. The CEO on the earnings call even said Company would considering selling itself. Additionally, Leap won't make a required $75 million payment due to Sprint for use of Sprint's network. Leap signed a national roaming agreement with Sprint back in 2010.

 

The question is if Leap is up for sale would it make sense for Sprint to buy? Would Leap bring more to the table than MetroPCS?

 

Articles:

 

http://www.fiercewir...cess/2012-08-06

 

http://seekingalpha....ay?source=yahoo

 

Earnings release:

 

http://finance.yahoo.com/news/leap-reports-second-quarter-results-200500576.html

 

Earnings call transcript:

 

http://seekingalpha.com/article/785271-leap-wireless-international-management-discusses-q2-2012-results-earnings-call-transcript?part=single

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Cricket can't pay their bill? It may be time to call these gentlemen:

 

repo-men-20100601001008907.jpg

 

If Sprint is thinking about making a move for Leap, now may be the time. Depending on the results of the November elections, VZW may decide to snap up Leap and/or Metro. The timing isn't ideal, of course, as Sprint is trying to execute network vision. Additionally, the $3B or so of debt that Leap is carrying is worrisome as well. Regardless of who the suitor is, Something is going to happen with Leap sooner rather than later i imagine. They should've taken that buyout offer from Metro several years ago...

 

Sent from my PG86100 using Tapatalk 2

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As I have said previously, Sprint should not pay anything to acquire Leap's network. Sprint does not need it. And Sprint should not pay anything to acquire Leap's subs. They are largely low ARPU, credit risk, non contract subs who could churn at any time. So, if Leap is interested in selling, Sprint should look into buying some of Leap's PCS 1900 MHz spectrum in select markets, nothing more.

 

AJ

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The best thing for Sprint to do is to acquire the spectrum and have Leap be another MVNO on top of Sprint's network.

 

Leap is building an AWS network based on licenses they got at auction. How much longer will they be working with Sprint?

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Leap is building an AWS network based on licenses they got at auction. How much longer will they be working with Sprint?

 

Leap was using Sprint to allow it to offer nationwide coverage. Their own spectrum doesn't cover the entire US.

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Leap was using Sprint to allow it to offer nationwide coverage. Their own spectrum doesn't cover the entire US.

 

Is leap going to offer multi spectrum devices to utilize whatever they are building on aws and Sprint evdo?

 

Sent from my CM9 Epic 4g Touch using Forum Runner

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Is leap going to offer multi spectrum devices to utilize whatever they are building on aws and Sprint evdo?

 

Sent from my CM9 Epic 4g Touch using Forum Runner

 

I believe they are building LTE on the AWS Spectrum.

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Is leap going to offer multi spectrum devices to utilize whatever they are building on aws and Sprint evdo?

 

Leap already sells tri-band (Cellular/PCS/AWS) CDMA2000 devices and has done so for 4-5 years because Leap operates several AWS only markets (e.g. Chicago, Oklahoma City, Las Vegas).

 

AJ

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Leap already sells tri-band (Cellular/PCS/AWS) CDMA2000 devices and has done so for 4-5 years because Leap operates several AWS only markets (e.g. Chicago, Oklahoma City, Las Vegas).

 

AJ

 

Nice, I did not know that :) Thanks for the info

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As I have said previously, Sprint should not pay anything to acquire Leap's network. Sprint does not need it. And Sprint should not pay anything to acquire Leap's subs. They are largely low ARPU, credit risk, non contract subs who could churn at any time. So, if Leap is interested in selling, Sprint should look into buying some of Leap's PCS 1900 MHz spectrum in select markets, nothing more.

 

AJ

 

Yes I agree with your assessment. If anything Sprint should buy all their PCS spectrum licenses and nothing more. If Sprint can't buy all of the PCS spectrum licenses, I would much rather have Sprint try to acquire all of Leap's PCS 'C' block spectrum (1902.5 - 1910 MHz, 1982.5 - 1990 MHz).

 

I just looked at the omega map below to see which PCS spectrum licenses would be most lucrative and used AJ's Sprint PCS spectrum Google docs for reference.

 

If the all of the PCS 'C' block spectrum were to be purchased, it would help increase some of those larger markets that have only 20 MHz like Houston, Salt Lake City, Albuquerque, Nashville, Memphis, Fresno, Raleigh, Cincinnati, Tulsa. Also some of those 30 MHz markets would be enhanced such as Phoenix, San Diego, Austin, San Antonio, Tucson, Portland, Kansas City, Louisville, Syracuse, Little Rock, Wichita.

 

http://specmap.sequence-omega.net/

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Although the PCS band would help Sprint, I don't see Leap selling off PCS assets except in liquidation.

 

The only acquisition I'd really like to see Sprint pursue is Clearwire.

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Although the PCS band would help Sprint' date=' I don't see Leap selling off PCS assets except in liquidation.

 

The only acquisition I'd really like to see Sprint pursue is Clearwire.[/quote']

 

Of course that purchase has gotten steadily more expensive this past week. Clearwire stock has risen more than 50%.

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The best thing for Sprint to do is to acquire the spectrum and have Leap be another MVNO on top of Sprint's network.

I agree. I don't have a problem absorbing their customers but the amount of debt is pretty significant. MVNO is the way to go and if leap goes down the tubes at least Sprint still has the spectrum.
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