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.
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