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Leap Loses Nearly 1M Customers in Past Year

Fri, 11/08/2013 - 10:21am
Ben Munson

Leap Wireless’ third-quarter numbers show the prepaid carrier has nearly one million less customers than it did at this time last year.

The prepaid carrier’s end-of-period customers for the third quarter totaled 4,643,430, down nearly 18 percent from the 5,633,819 it had at the end of the third quarter in 2012. Still, Leap’s net customer losses of 196,000 represented a 27 percent improvement over the 269,000 net customer losses posted a year ago.

For its core wireless customers—excluding Cricket Broadband and Cricket PAYGo customers—Leap saw a 23 percent annual decrease in losses and improved the churn rate to 3.5 percent from 4.2 percent.

In addition to the customer losses, Leap saw a 10.3 percent annual dip in revenue and swung to a net income loss of $160 million, compared to a net income of $27 million a year ago.

In July, Leap agreed to be acquired by AT&T for $1.2 billion. AT&T expressed its wishes to become a healthy competitor in the prepaid market, partly by acquiring Leap’s customers—totaling 5 million at that point—in addition to getting Leap’s spectrum licenses and other assets. Analyst firms like BMO Harris said AT&T was overpaying for Leap’s spectrum with the deal, which is valued at $15 per share.

Leap’s shareholders last week approved the AT&T buyout and now the deal moves onto the FCC and DOJ for regulatory approval. AT&T said during its third quarter earnings call it expects the deal to close by the first quarter of 2014.

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