Thursday February 25, 7:30 am Eastern Time
Company Press Release
SOURCE: Leap Wireless International, Inc.
Leap Wireless International Operating Company PEGASO PCS Launches 1st Market of $1.3 Billion Wireless Network in Mexico
- Mexico's First 100% Digital Wireless Network to Build Country's Telecom, Economy -
SAN DIEGO and TIJUANA, Mexico, Feb. 25 /PRNewswire/ -- Wireless communications carrier Leap Wireless International, Inc. (Nasdaq: LWIN - news) today announced that its Mexican operating company, PEGASO PCS, launched the first 100% digital wireless network in Mexico. PEGASO, which plans a $1.3 billion nationwide network, today made the ceremonial first wireless call on its system in Tijuana, one of the fastest growing cities in Mexico. After Tijuana, it plans to launch in Mexico City, Monterrey and Guadalajara in 1999 -- the country's four largest economic centers. The PEGASO commercial launch, at a ceremony in Tijuana, was attended by Carlos Ruiz Sacristan, Mexican Secretary of Communications and Transportation; Alejandro Gonzalez Alcocer, Governor of Baja California; and Javier Lozano Alarcon, president of Cofetel, the Mexican Federal Communications Commission.
''We believe PEGASO will be successful because of its digital wireless technology, user-friendly marketing plans and on-target distribution strategy,'' said Harvey P. White, Leap's chairman and CEO. ''PEGASO's 100% digital technology will protect customers from cloning. PEGASO will offer customers simple pricing plans and billing, with no contracts required. And it will reach customers through PEGASO's own stores, in-store displays at retail chains, direct sales and telemarketing.''
PEGASO expects to offer wireless local loop in addition to mobility service in the future, as its licenses cover both. Teledensity the number of phone lines per 100 people is only 9.7% in Mexico compared to 64% in the United States. The Mexican government has pledged to add 9.5 million phone lines in the next five years. While more than a quarter of Americans use wireless phones, in Mexico, a country of nearly 100 million people, only 3.5% have wireless phones. But wireless customers in Mexico grew an astonishing 90% in 1998.
''The economies of the U.S. and Mexico are very tightly entwined,'' White said. ''Telecommunications infrastructure is imperative to support economic growth in Mexico, and wireless is the fastest, most cost-effective way to add new phone lines. PEGASO's nationwide digital wireless network is going to infuse new strength into the economic muscle of Mexico.''
In addition, PEGASO and Sprint PCS have signed the first 100% digital U.S.-Mexico roaming agreement. The roaming agreement will enable PEGASO customers to use the nationwide Sprint PCS network. Sprint PCS customers will be able to roam automatically onto PEGASO's digital network when they visit Mexico. In addition the agreement is expected to offer calling plans that enable competitive cross-border wireless communications in selected twin cities along the 2,000-mile U.S.-Mexico border, starting with San Diego and Tijuana. With more than 4 million people, the San Diego-Tijuana metropolitan region is home to the world's busiest border crossing. There are 5.8 million border crossings into San Diego from Mexico every month, and Tijuanans have spent billions of dollars on shopping, recreation and tourism in San Diego in the last decade.
''This roaming agreement will give PEGASO's customers significant advantages when they travel in the U.S. -- a simple, user-friendly way to stay permanently connected,'' said Alejandro Diez Barroso, president of PEGASO PCS. ''In addition, Sprint PCS customers will be able to roam automatically onto PEGASO's nationwide, digital network when they visit Mexico.'' Roaming is expected to be available in the second quarter of 1999.
''This agreement is an important first step in blurring the border between San Diego and Baja, creating communications to enhance business, government and productivity,'' said John M. Eger, executive director of the International Center for Communications, a San Diego organization that promotes border-free communications. ''But more importantly, it brings the two peoples together in a way that no other innovation can.''
The PEGASO network is backed by a consortium of shareholders from around the world -- Leap, Citicorp Equity Capital Latin America, AIG-GE Capital Latin America Infrastructure Fund, Nissho Iwai Corporation, Grupo Televisa, the world's largest Spanish-language media company, and Grupo Pegaso, a privately held conglomerate. QUALCOMM Incorporated is the largest supplier of infrastructure equipment for the network, providing Qcell(TM) base stations and Qcore(TM) base station controllers, as well as related program management and deployment services to PEGASO. Alcatel is providing a wide variety of state-of-the-art equipment and services to the PEGASO network, including towers, microwave transmission equipment, switches, a billing system, and deployment services such as cell site acquisition. PEGASO customers will choose from handsets manufactured by QUALCOMM, Samsung, and Hyundai.
About PEGASO PCS
With a planned initial investment of approximately $1.3 billion, Pegaso is deploying the first 100% digital network in Mexico. Pegaso plans to offer nationwide PCS service, launching in the country's four largest cities in 1999, starting with Tijuana at the end of February and moving on to Mexico City, Monterrey and Guadalajara. The Pegaso network will be one of the largest in the Americas. Having acquired the necessary licenses to offer mobile and wireless local loop services nationwide, Pegaso expects to offer top-quality service to a significant share of the Mexican market in the coming years.
About Leap Wireless International
Leap Wireless International, Inc., headquartered in San Diego, California, is a wireless communications carrier that deploys, owns and operates wireless networks in domestic and international markets with strong growth potential. In conjunction with its strategic partners, Leap is building or anticipates building a combination of fixed and mobile wireless solutions in Mexico, Chile, Australia, Russia and the United States. The world is going wireless, and Leap believes that CDMA is the technology of choice to increase the teledensity that is critical to economic growth. For each of its ventures, Leap is actively involved in management of the systems, combining its experience in international markets with its wireless technical expertise in CDMA. Leap is dedicated to bringing the benefits of reliable, cost-effective and high-quality voice and data services to domestic and emerging markets. For more information, please visit the company's web site at <http://www.leapwireless.com>.
This news release contains certain ''forward-looking statements,'' including statements regarding the future scope of PEGASO's wireless network. Forward-looking statements, which are based upon certain assumptions and describe future plans, strategies and expectations of the Company, are generally identifiable by use of the words ''believe,'' ''expect,'' ''intend,'' ''plan,'' ''anticipate,'' ''estimate,'' ''project'' or similar expressions. The ability of the Company to predict actual results and other future events is inherently uncertain. Important factors which may cause actual results to differ materially from the forward-looking statements contained herein or in other public statements by the Company are described in the section entitled ''Risk Factors'' in the Company's 1998 10-K, most recent 10-Q and other documents on file with the Securities and Exchange Commission. Those factors most likely to cause actual results to differ include but are not limited to: the currency exchange and economic risks associated with Mexico, uncertainties regarding Leap or PEGASO's ability to access the capital markets, the delayed build out of the PEGASO network, failure of the PEGASO network to perform according to expectations, and competitive pressure that could affect market demand for PEGASO's services.
SOURCE: Leap Wireless International, Inc.
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