AT&T acquires Leap Wireless
15 July 2013 |
AT&T has signed an agreement to acquire US provider Leap Wireless for approximately $1.2 billion.
The US communications company will acquire the entirety of Leap’s stock and wireless properties, which includes licences, network assets, retail stores and an estimated 5 million subscribers.
Leap operates a 3G CDMA network, as well as a 4G LTE network, in 35 US states, and has been struggling with $2.8 billion of net debt since April 15 this year.
The deal is hoped to address this debt, and Leap shareholders are expected to receive a contingency right entitling them to the net proceeds from the sale of its 700MHz block of spectrum in Chicago, which the company obtained in August last year.
Leap operates under the Cricket brand, which AT&T will retain, and its customers will benefit from access to AT&T’s 4G LTE network and distribution channels, as well as a presence in additional US cities.
The combined company will result in better financial resources and a larger scale to compete against rival firms, and is designed to improve customer care and notably enhance mobile internet experience.
The transaction is awaiting final approval by the Federal Communications Commission and the Department of Justice and, once received, AT&T plans to utilise Leap’s unused spectrum to develop its 4G LTE reach across the US.
AT&T expects the deal to be finalised in the next 6-9 months.