My good "spin" on : "as many as 5% of its subscribers didn't exist."
This occurred to me after I shut down my computer last night :
1. If Leap has something in the "ballpark" of 1 million reported customers, then 5% of that number is 50,000.
Leap is already over 50,000 customers AHEAD of various projections that Leap management made at various points during the last year (all of which were regarded as being "hopelessly optimistic" by the "experts" on Wall Street).
(For example -- in late 2001, there was a big "hullabaloo" (sp. ?) regarding : Could Leap possibly reach 1,000,000 subscribers by 12/31/01).
Then, Leap said that they felt they could actually reach 1,100,000.
Then, Leap reported that they reached over 1,100,000 (by an amount that was certainly not "orders of magnitude" different from the "magic" 50,000 number).
When you combine everything I just said with a few details such as :
A. Leap management has stated they are aware of this whole fraud issue, they are working on it, and they believe it can be reduced significantly.
B. Leap management has stated that fraud is a problem for ALL wireless carriers (not just Leap Wireless).
And, no one has contradicted this point.
And, no other wireless carrier has come forward (of course) to talk about how fraud has affected their numbers.
And, (most important to me) : Harvey White has said publicly AFTER Wall Street started punishing LWIN shares (after the supposed "bombshell" announcement of "Gee, there is fraud in the business of signing up new wireless customers") :
That the fraud situation is ALREADY figured in to Leap management's commentary and projections for the rest of the year 2002 going forward.
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And ... another thought :
2. Regarding Leap's revenues reported for the quarter -- if you assume that checks being deposited into the bank each day and week during the quarter are numbers that are known and "real" ...
What does it mean if Leap says "Whoops, it looks like a percentage of our subscribers were actually not ' there ' " ?
It means HIGHER ARPU.
This is just arithmetic.
(If anyone can explain away this one, please tell me where I went wrong).
Jon. |
