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AT&T to Acquire Cricket Prepaid Brand

AT&T announced today that they have entered intro an agreement to acquire Leap Wireless, best known for its Cricket prepaid brand. AT&T is paying $15 per share or about $1.2 billion for Leap and is also acquiring Leap's 2.8 billion in debt. The deal is subject to shareholder, FTC and FCC approval and is expected to take six to nine months.

Assuming the deal goes through, which seems likely, AT&T will wind up with Leap's estimated 5 million subscribers and 3,400 employees.  AT&T will also get towers, spectrum and stores in the 35 metropolitan areas that Cricket serves, including Chicago, San Diego, Seattle, Philadelphia, Washington DC and Baltimore. The bulk of Cricket's spectrum is in the 1700 (AWS) and 1900 Mhz bands, both of which AT&T also uses. AT&T plans to sell the undeveloped 700 Mhz "A block" spectrum which Cricket recently acquired in the Chicago market.

AT&T plans to retain the Cricket brand name and says the deal will "...jump start AT&T’s expansion into the highly competitive prepaid segment."  AT&T says that as soon as the deal closes it will deploy LTE in Cricket's sizable chunk on unused spectrum, which covers 41 million people. AT&T also plans to let Cricket customers who own an LTE capable Cricket phone use the AT&T LTE network as soon as the sale is finalized.

There's no mention of what will happen with Cricket's CDMA/EVDO network which is incompatible with AT&T's GSMA/HSPA+ technology. I suspect they will do what T-Mobile is doing with its acquisition CDMA based MetroPCS, gradually shut the CDMA network down and move customers to GSM.

With the addition of Leap's 5 million, AT&T will have a total of approximately 112 million subscribers, just behind Verizon's 115 million.

More from PrepaidPhoneNews:
Prepaid Operator Profile: Cricket

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13 comments:

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  1. Wow. I wonder if they'll keep the Cricket name or they'll be rebadged as AIO Wireless.

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    1. It sounds like they are going to keep the Cricket name ... at least for now.

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  2. As an AT&T stock holder I sure hope they will NOT keep Leap's 3,400 employees, just a waste of my money.

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    1. Yes let's hope they all end up homeless, on welfare, and on SNAP so that YOUR taxes then support them and their children....horrible comment...

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  3. Cricket and Metro should have merged when they had the chance to create a super independent. Too late now. I think the FCC will monkey wrench it though.

    To the Att stockholder. I hope your merger attempt fails.

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    1. This is not a merger it is an acquisition. I don't see any way that this would not go through.

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    2. It still has to be approved by the FCC and FTC, either could reject it. But I don't think that's likely given Leap's relatively small size and shaky finances.

      On the other hand T-Mobile, Sprint, Dish or another company could make a better offer for Leap. Leap shares are above $17, $2 higher than AT&T's offer, in after hours trading indicating that some investors are betting on a bidding war.

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    3. T-mobile is the next one to be acquired, because of their spectrum position most probably by Dish,(target price of $35-$40 a share of TMUS is very possible) and it will happen much faster than you think.

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    4. Dennis, my read on the market rise is the relative stability of ATT. By association, that makes Leap/Cricket a safer investment.

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    5. Tmobile will not be the next carrier to be consolidated. This would decrease competition, something the Gov would be against. Instead, I predict it will be C Spire, U.S. Cellular, ATN, Ntelos or Cincinnati Bell, the last big regional carriers. Together they have 7m subscribers of of the 8m remaining after Leap is sold. There will be no super-independents. They never had enough cash or spectrum, and they had too much debt for this to happen.

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  4. To the ATT stockholer, I hope you lose your job as well. Be careful what you wish for, because those 3400 people have families too and kids to feed.

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    1. I agree that it's pretty jarring to see someone hope for all people losing their jobs in companies taken over so that they can make a few extra bucks on their stock. Creative destruction in capitalism can be rough on people affected, but the efficiency and wealth it creates, and the job opportunities created when this new wealth is reinvested is what made our economy the biggest in the world. These new opportunities and lower prices through increased efficiency and competition raised up the standard of living of everyone, rich and poor. I remember the old American Telephone & Telegraph Company (AT&T) when it held a virtual monopoly on home telephone service. It worked, but long distance calls were very expensive. Telephones worked reliably as long as you could spin the dial; there was no innovation. The old AT&T employed many people, but nowhere near the number of people now employed in the current US telecommunications industry, with all of its innovative choices. I expect that the new AT&T will make smart business decisions when it integrates Leap into its network, and will retain all the Leap employees whose labor will contribute a return on investment in meeting AT&T goals.
      I also hope that the employees who lose their jobs are able to find other jobs quickly, so that working Americans (including AT&T stockholders) do not have to pay them to sit home for a couple of years under our new "compassionate" policies. Only 47% of adults are working full time now, which is sad.

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  5. My son works for Cricket Mobile. Your crass statements about hoping people lose their jobs really struck a chord with me. That is what is wrong with our world today. People want to make the almighty dollar no matter what the cost to others. I agree that the 47% problem should be fixed, however, have some compassion. The Cricket workers are working and not living off the taxpayers. I really pray that you are never in that position. You never know the pain of being out of work until you and you are unable to find work quickly....

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