All LEAP INTERVIEW:
Leap Wireless Chairman & CEO - Interview
FDCH CEO Wire/Associated Press
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NEIL CAVUTO, THE CAVUTO BUSINESS
REPORT: Welcome back everybody. You
know they've been kicked out of mama's nest,
but not without some significant holdings and
some very big bucks. We are talking about QUALCOMMs (Company:
[ Qualcomm Incorporated ] ; Ticker: QCOM; URL:
http:www.qualcomm.com) recent spinoff of its wireless license division.
Leap Wireless (Company: Leap Wireless International Inc; Ticker: LWIN;
URL: leapwireless.com) as it's known. We're talking about them
because they are in an industry where takeovers and takeover rumors are
now running rampant. So what does Harvey White, the CEO of Leap
Wireless have planned for his company? Let's find out. Harvey good to see
you. Welcome.
HARVEY WHITE, CHAIRMAN & CEO, LEAP WIRELESS: Thank
you. Glad to be here.
CAVUTO: Thank you for coming. Now as the former president of
QUALCOMM, I was just joking about this with you. I don't know whether
you were crazy or a genius. Maybe a little of both, for taking this leap.
WHITE: Well, I really felt we had a lot of shareholder value locked up in
these properties that wasn't being recognized in the industry by the financial
community. And it wasn't right for the shareholders. So, we needed to put
this out where it could get attention and where we could grow it and make it
prosper on its own. So, .
CAVUTO: Kind of like the [ AT&T ] (Company: AT&T; Ticker: T; URL
att.com /Lucent (Company: [ Lucent Technologies
Incorporated ] ; Ticker: LU; URL: lucent.com thing.
WHITE: AT&T/Lucent, we did have the conflict customer. Selling to our
customers.
CAVUTO: Right, exactly.
WHITE: .and competing with them, but we also, I think, had more locked
up value relatively. Not absolute dollars, but percentage wise in these
properties that just wasn't being recognized at all.
CAVUTO: This is a major headache to take on. I mean here you go running
off to this thing on a luck, a promise, and a hope, essentially.
WHITE: Well, I think it's a bit more than a luck, a promise, and a hope.
CAVUTO: But, no sooner does that happen then you're going to get Latin
America falling out of bed. You get questions about Russia's stability. All
key markets where you want to do business.
WHITE: Well, when we planned it, I must admit, those weren't in the
equations.
CAVUTO: Weren't in the equations.
WHITE: It was a taxable transaction to our shareholders and it was very
important that we minimize the taxes by getting it done in September, before
the end of QUALCOMM's fiscal year. So, we moved ahead, because we
believed in the long term it was the right thing to do, it was going to be
prosperous. Yes, I got a few more gray hairs. I don't know, if I can have
any more gray hairs than I have.
CAVUTO: Well, you've certainly been making a great deal of inroads there
and obviously scoring a great deal of deals, but I do want to talk about
where you have some key wireless systems in Mexico, in Russia, in Chile,
and Australia. And I'm reminded if I can focus on Latin America for now.
WHITE: Sure.
CAVUTO: We're debating giving a $30 billion rescue package to Brazil. I
know the Brazilian President, Cordoso was reelected. Did you breath a sigh
of relief with that?
WHITE: Actually I did because, unfortunately, people tend to lump Latin
America together. While we don't have any interest in Brazil, if Brazil
staggers then the rest of Latin America tends to fall.
CAVUTO: Sets the tone for Latin America.
WHITE: Which is unfortunate because certainly the economies in Mexico,
Chile, where we do have properties, are not that linked to what is actually
happening in Brazil, particularly Mexico has tremendous commerce with the
U.S. across the NAFTA borders.
CAVUTO: And people forget wireless communication down there is huge.
WHITE: Oh, yes.
CAVUTO: It's the way to do things.
WHITE: Well, what we're going to see in the future, I believe, is we're going
to see countries where there are more wireless users than wired users
because.
CAVUTO: Well, that's the case down there isn't it?
WHITE: Well, it's not there yet, but it will because the tele-density needs are
there and the fastest, cheapest way to do that is wireless, and so, that's
what's going to happen. And -- that's not just the high end user. You and I,
we're used to getting a cellular phone as a second phone. In the future,
people are going to come to places like New York, and their going to see a
phone with a wire hanging off of it and they're going to say, what is that? I
never saw one like that?
CAVUTO: Well, we're already moving that way in this country, aren't we?
Increasingly, now you're hearing a lot of people who are looking at, if they
get the rates down low enough where that wireless phone will be the phone.
For all .
WHITE: And it will, but, in particularly in the countries where they're going
to increase the tele-density. Because there it's leap-froging to the front of the
pack.
CAVUTO: You know, no sooner than you launch on your own and do this
stuff than we're dealing with some of these questions in our own country,
and globally. How do you put up whatever the fine virtues of your
technology and where do you see your business plan going with a world that
might be going in a global funk?
WHITE: Well, tele-density is part of the basic infrastructure that countries
need to have. They have to have power, and transportation, and
telecommunications if they're going to expand their economies. It's just as --
if you look at a chart of the Gross Domestic Product per capita,
tele-density, it's a one to one correlation, and they're going to have to do
that. They're going to give priority to these infrastructure pieces. Doesn't
mean that everything is going be perfect or easy, but I don't think there's any
choice but to build that if you're going to keep the economy growing in these
countries.
CAVUTO: All right Harvey. Thank you for stopping by. Congratulations
again.
WHITE: The pleasure is mine.
CAVUTO: Harvey White, the Chairman and CEO of Leap Wireless.
Former president of QUALCOMM.
END
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Publication Date: October 06, 1998
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