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Old Jul 12, 2013, 04:31 PM   #1
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AT&T to Acquire Prepaid Carrier Leap Wireless/Cricket for $15/Share




AT&T has agreed to acquire Leap Wireless, the parent company of prepaid U.S. wireless carrier Cricket, for $15/share -- roughly $1.2 billion in cash, plus the $2.8 billion in net debt that the company holds.

The company has 5 million subscribers, and AT&T will keep the Cricket brand and retail stores operating. Last year, Leap engaged in a three-year agreement with Apple to sell iPhones.
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AT&T Inc. and prepaid wireless provider Leap Wireless International Inc. have entered into an agreement for AT&T to acquire Leap for $15 per share in cash. Under the terms of the agreement, AT&T will acquire all of Leap's stock and wireless properties, including licenses, network assets, retail stores and approximately 5 million subscribers. As of April 15, 2013, Leap had $2.8 billion of net debt. Leap shareholders will also receive a contingent right entitling them to the net proceeds received on the sale of Leap's 700 Mhz "A Block" spectrum in Chicago, which Leap purchased for $204 million in August 2012.

Leap's network covers approximately 96 million people in 35 U.S. states. Leap currently operates -- under the Cricket brand -- a 3G CDMA network, as well as a 4G LTE network covering 21 million people in these areas, and has 3,400 employees.
The transaction is expected to be closed within six to nine months.

Article Link: AT&T to Acquire Prepaid Carrier Leap Wireless/Cricket for $15/Share
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Old Jul 12, 2013, 04:34 PM   #2
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Congrats to those stock holders... :P
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Old Jul 12, 2013, 04:45 PM   #3
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I'm sure cynics will disagree, but I suspect AT&T won't change much about Cricket. This gives them the ability to gain price-sensitive customers without diluting the AT&T brand with lower-priced plans. Absorbing or altering Cricket would destroy that opportunity.
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Old Jul 12, 2013, 04:47 PM   #4
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Excuse my ignorance but, why would AT&T, a GSM carrier, want Leap/Cricket, a CDMA carrier?
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Old Jul 12, 2013, 04:48 PM   #5
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I'm sure cynics will disagree, but I suspect AT&T won't change much about Cricket. This gives them the ability to gain price-sensitive customers without diluting the AT&T brand with lower-priced plans. Absorbing or altering Cricket would destroy that opportunity.
I was just wondering myself what ATT will do with them. I guess time will tell.
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Old Jul 12, 2013, 05:03 PM   #6
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Excuse my ignorance but, why would AT&T, a GSM carrier, want Leap/Cricket, a CDMA carrier?
Spectrum for LTE
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Old Jul 12, 2013, 05:03 PM   #7
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Excuse my ignorance but, why would AT&T, a GSM carrier, want Leap/Cricket, a CDMA carrier?
Most likely spectrum. The customer base isn't the greatest, and as you mention, they use different voice technologies.
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Old Jul 12, 2013, 05:07 PM   #8
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I wonder if AT&T will use this to improve their network...no, no probably not.
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Old Jul 12, 2013, 05:41 PM   #9
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poor t-mobile

t-mobile - they are left out distant fourth (with sprint bought with clearwire and cash from softbank take over)

t-mobiles does not have lower frequency and no more spectrum ...

and poor citizens us - we have one less choice!
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Old Jul 12, 2013, 05:52 PM   #10
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Cool. Just keep inching closer to a monopoly...
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Old Jul 12, 2013, 06:26 PM   #11
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Originally Posted by shanmugam View Post
t-mobile - they are left out distant fourth (with sprint bought with clearwire and cash from softbank take over)

t-mobiles does not have lower frequency and no more spectrum ...

and poor citizens us - we have one less choice!
T-Mobile has more LTE up than Sprint. Cash was not Sprints problem.
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Old Jul 12, 2013, 07:05 PM   #12
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Cool. Just keep inching closer to a monopoly...
The company was deep in bankruptcy, buying them is a lot better in many ways rather letting them fall apart.
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Old Jul 12, 2013, 07:26 PM   #13
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Cool. Just keep inching closer to a monopoly...
AT&T still remains a monopoly from the old days, albeit a smaller one.
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Old Jul 12, 2013, 08:01 PM   #14
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Less competition, higher prices. What isn't to like?
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Old Jul 12, 2013, 08:01 PM   #15
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Leap shareholders will also receive a contingent right entitling them to the net proceeds received on the sale of Leap's 700 Mhz "A Block" spectrum in Chicago, which Leap purchased for $204 million in August 2012.
Does that mean AT&T is planning to sell this "A Block" spectrum to another company? I wonder if that is because of an expected FCC requirement for approving the merger, as AT&T probably owns "B Block" spectrum in that area.
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Old Jul 12, 2013, 09:05 PM   #16
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Excuse my ignorance but, why would AT&T, a GSM carrier, want Leap/Cricket, a CDMA carrier?
So they can eliminate all competition. One day there will be one american phone company
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Old Jul 12, 2013, 10:18 PM   #17
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So they can eliminate all competition. One day there will be one american phone company
Until they get broken up, again.
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Old Jul 13, 2013, 12:10 AM   #18
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Old Jul 13, 2013, 06:42 AM   #19
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Until they get broken up, again.
And the cycle repeats itself.

Somewhere along the way I'm sure we will have a massive government bailout at taxpayer expense because these monopolies will be deemed "too big to fail."
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Old Jul 13, 2013, 08:02 AM   #20
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Paying effectively $4Bn ($1.2Bn in cash and taking on $2.8Bn in debt) for 5 million customers - that's $800 per PRICE SENSITIVE customer - did AT&T have some kind of mental flip-out?
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Old Jul 13, 2013, 08:18 AM   #21
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Paying effectively $4Bn ($1.2Bn in cash and taking on $2.8Bn in debt) for 5 million customers - that's $800 per PRICE SENSITIVE customer - did AT&T have some kind of mental flip-out?
It's a about the spectrum. AT&T couldn't care less about their customer base. They were rapidly losing customers anyway.
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Old Jul 13, 2013, 08:37 AM   #22
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It's a about the spectrum. AT&T couldn't care less about their customer base. They were rapidly losing customers anyway.
Actually the fact is smartphones are near saturation as seen by both Apple & Samsungs sales numbers. Therefore any loss of contract subscribers is a reflection of the current market conditions. While there's always room for improvement, AT&T is very adept at customer retention. They didn't grow to their present size without providing good customer service.
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Old Jul 13, 2013, 09:20 AM   #23
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Originally Posted by bjsterilite View Post
Excuse my ignorance but, why would AT&T, a GSM carrier, want Leap/Cricket, a CDMA carrier?

Hspa and lte are just newer versions of CDMA anyway
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Old Jul 13, 2013, 12:02 PM   #24
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Actually the fact is smartphones are near saturation as seen by both Apple & Samsungs sales numbers. Therefore any loss of contract subscribers is a reflection of the current market conditions. While there's always room for improvement, AT&T is very adept at customer retention. They didn't grow to their present size without providing good customer service.
ATT is very bad at customer retention.

They just charged a 70 cent fee for no reason but to get their balance sheet up by $775 million. I quit out of spite. Was paying $140/month on my service. So I have negated 200 customers worth of 70 cent fee.

The only reason ATT has a reputation is because of their coverage along with Verizon. Customers are just fodder for their balance sheets.
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Old Jul 13, 2013, 01:35 PM   #25
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ATT is very bad at customer retention.

They just charged a 70 cent fee for no reason but to get their balance sheet up by $775 million. I quit out of spite. Was paying $140/month on my service. So I have negated 200 customers worth of 70 cent fee.

The only reason ATT has a reputation is because of their coverage along with Verizon. Customers are just fodder for their balance sheets.
If AT&T and VZW are so bad, why have they been the only carriers having a net gain of subscribers quarter after quarter? Customer retention is so bad that they keep adding customers right?

Why have TMobile and Sprint been loosing customers during the same period? Because they have terrible customer retention. Uncarrier just makes that worse because they have no incentive to stay, ever.

If 70 cents is too much to pay, I hear not eating saves money in the long run too.

AT&T and VZW have fantastic customer service. The opposite of your beloved TMobile, who has the worst customer service in the business.

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Originally Posted by mschmalenbach View Post
Paying effectively $4Bn ($1.2Bn in cash and taking on $2.8Bn in debt) for 5 million customers - that's $800 per PRICE SENSITIVE customer - did AT&T have some kind of mental flip-out?
Spectrum and they have the money.

Leap will probably be shut down eventually and the spectrum will be used for LTE and HSPA. Very similar to TMobile's MetroPCS merger.
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