U.S. carriers seem to be all over the news lately. First, Softbank’s acquisition of Sprint for $21.6 billion was approved and finalized earlier this week. Then, T-Mobile announced it’s Jump program that allows customers to switch phones twice a year, and there’s also rumors of Verizon going into Canada for an expansion. The only carrier that didn’t had news was AT&T, so they obviously had to do something about it, so they announced that they purchased Leap Wireless for about $1.19 billion. Let’s remember that the rumor of this started about a year ago.
There’s been some rumors that T-Mobile was eyeing Leap for an acquisition after the Metro PCS deal but that one ended up evidently false.
The price disclosed by AT&T was of $15 per share, and since Leap has 79.05 million shares, you can do the math. The price of $15 a share is way above the market price of Leap’s share which was at $7.98 on Friday. Obviously, AT&T was trying to close the deal without much negotiation, or they would have gone for a lower price.
Leap has about 5 million users and they’ll be happy to know that the Cricket brand will continue to operate as usual. What AT&T is really getting with the purchase is spectrum. Leap has PCS and AWS bands that fit just fine with AT&T’s current spectrum. Once the deal is finished, AT&T will use the acquired spectrum for its LTE rollout.
Leap’s Cricket network has both 3G CDMA and 4G LTE covering 21 million people and has 3,400 employees, which AT&T will have to take care now. The real good news for Cricket customers is that AT&T is planning to provide them with access to its 4G LTE mobile network giving them much more coverage than what they had before, while expanding Cricket’s presence in more cities across the U.S.
This will help competition in the prepaid market and that could only mean better devices, better customer service and better networks, so everyone’s a winner with this.
As usual, the deal will have to be reviewed by both the Federal Communications Commission (FCC) and the Department of Justice (DoJ), which according to AT&T, is should be complete in six to nine months.