In an effort to boost its subscriber growth, Leap
Wireless International Inc. ( LEAP ),
plans to launch an array of attractive service plans from the
beginning of next month. The company offers wireless communication
services in the U.S., under the "Cricket" brand primarily through
its wholly-owned subsidiary Cricket Communications Inc.
Firstly, LEAP Wireless will make its popular Muve Music service
available to all Android-based smartphones at no extra cost and
without any contract terms. Smartphone data plans will be starting
at $50 per month with unlimited talk time, text and 1 GB 3G full
speed data usage.
For $60 and $70 monthly plans, apart from unlimited talk time,
the customers can access 3G full speed data of 2.5 GB and 5 GB per
month, respectively. However, the Muve Music service automatically
stops if a customer terminates the service.
Secondly, the company is improving its international calling
service by introducing Global Plus Bundle to its customers at $15
per month. Important features of this plan are that the subscribers
will be offered a local telephone number in the country of their
choice coupled with 500 minutes of outgoing international landline
and 30 minutes of outgoing international mobile calls free.
LEAP Wireless has also added other important features like
Visual Voice Mail (which helps to prioritize messages), My Account
service (to easily refill balances) and also allows an individual
to get six connections on the same account.
In the recently concluded quarter, the company reported a drop
in subscriber growth. So we believe that the launch of such
attractive plans will accelerate its subscriber growth in the
We also believe that such promotional efforts initiated by the
company will help its low-end customers using only feature phones
to subscribe for smartphone services, thereby driving its top-line
However, the up gradation of customers from feature phones to
smartphones will result in huge consumption of data, thereby
causing shortage of spectrum. In order to counter this issue, LEAP
is planning to roll out its 4G LTE service in the U.S.
Recently, the company sold 23 PCS and 13 AWS spectrum to
Verizon Communication Inc. ( VZ ) for
about $120 million, which will be utilized to set up 4G LTE
service. Additionally, the company also acquired 12 MHz of 700 MHz
A block spectrum in Chicago from Verizon.
We maintain our long-term Neutral recommendation for
LEAPWireless International Inc. Currently, LEAP has a Zacks #3
Rank, implying a short-term Hold rating on the stock.
LEAP WIRELESS (LEAP): Free Stock Analysis
VERIZON COMM (VZ): Free Stock Analysis Report
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