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
Kind of defeats the purpose of Cricket if this starts.
Companies like Leap and MetroPCS don't exactly have an easy go of things -- especially right now. With the release of the iPhone 4S still fresh in consumers' minds, rival AT&T has cleaned up by selling more than 6 million units in the first two months of the fourth quarter. Verizon Wireless, the joint venture of Verizon and Vodafone Group, is also expecting strong fourth-quarter iPhone sales, but at the expense of its gross margin. For a company like Leap to add subscribers in an environment where technological shifts can occur on the drop of a dime is encouraging. Still, with Leap expecting very steep losses in 2012 and the company buried under $3.2 billion in debt, I'd advise passing on the stock despite today's sizable haircut.
Last Thursday, a JPMorgan analyst told clients that two wireless companies, Leap Wireless International Inc. and MetroPCS Communications Inc., could be targeted by AT&T or T-Mobile for takeovers. MetroPCS rose 8 percent Tuesday, and Leap rose over 6 percent.
Would you want to be there when the crap hits the fan? I personally know the books are dirty and have been since they emerged from bankruptcy. I just hope they catch some of the people embezzling money and they end up going to jail so the company has a chance at surviving. As it sits right now Cricket is nothing more than and investment pyramid scheme.
I think what happens is that the CFO finds out or was asked to do something highly illegal. When he confronted the people over it they are asked to leave the company and was paid off to keep quiet.
The last CFO left on nice golden parachute, I wouldn't be surprised if this one did too.
Would you want to be there when the crap hits the fan? I personally know the books are dirty and have been since they emerged from bankruptcy. I just hope they catch some of the people embezzling money and they end up going to jail so the company has a chance at surviving. As it sits right now Cricket is nothing more than and investment pyramid scheme.
I think what happens is that the CFO finds out or was asked to do something highly illegal. When he confronted the people over it they are asked to leave the company and was paid off to keep quiet.
The last CFO left on nice golden parachute, I wouldn't be surprised if this one did too.
"Supposedly" went to work for another company.. Ya there is definitely something going on.
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Originally Posted by nTranced
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