As the prepaid wireless market is getting more competitive owing
to the availability of attractive wireless plans by other low-cost
Leap Wireless International Inc.
), which primarily caters to low income groups, has recently added
BlackBerry Curve 9350 handsets to its ever expanding smartphone
portfolio, enhancing its competitive edge.
The new BlackBerry OS 7 based-smartphone, featuring a 5
megapixel camera and memory expandable up to 32GB, is available at
LEAP stores for $199.99 without any contract terms. Moreover, the
handset comes with an attractive LEAP's prepaid wireless plan of
$55 a month that offers unlimited talk time, text and data to its
A few days back, LEAP also announced the availability of
) iPhone 4S from its stores. Leap Wireless is the first prepaid
operator to sell iPhones to U.S. subscribers without any contract
We believe that the company's new strategy of selling
smartphones to its subscribers at a higher price than
Verizon Communication Inc.
) will increase competition in the prepaid market. This is because
of the fact that LEAP offers unlimited $55 plans that offer talk
time and data usage compared to Verizon's and AT&T's $70 and
$60 limited plans.
Moreover, these large carriers sell high-value smartphones with
a minimum of 2 years postpaid contract terms while LEAP offers such
smartphones without any contract terms.
During the first quarter of 2012, Leap Wireless added around
258,060 net customers, down 21.9% year over year. So we believe
that such a move initiated by LEAP will not only help them to drive
customer growth but also help them to counter the stiff competition
that exists in the prepaid market.
Currently, Leap Wireless International Inc. has a Zacks Rank #3,
implying a short-term Hold rating.
Based in San Diego, California, Leap Wireless International Inc
provides digital wireless communication services in the U.S. under
the "Cricket" brand primarily through its wholly-owned subsidiary
Cricket Communications Inc.
APPLE INC (AAPL): Free Stock Analysis Report
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