To All: re. LWIN auction wins and quarterly results. If posted before, regrets.
Leap Wireless International Agrees to Pay $18.7 Million for 36 Markets Won in U.S. Government's PCS Reauction
*Low Price per POP to Facilitate Deployment of Leap's Unique Cricket Concept
SAN DIEGO, Apr. 15, 1999 -- Wireless communications carrier Leap Wireless International, Inc. today announced that it was the highest bidder on 36 licenses covering 11.2 million potential customers (POPs) for $18.7 million, or $1.66 per POP, in the U.S. government's reauction of PCS spectrum. The low price per potential customer is expected to facilitate Leap's deployment of its unique Cricket service, which brings wireless to an untapped consumer market by offering unlimited local wireless calls for a low, flat monthly rate. Leap is awaiting a ruling from the Federal Communications Commission (FCC) on whether it qualifies as a designated entity, a status that would enable Leap to acquire licenses for PCS spectrum in the C and F blocks. The licenses can transfer to Leap only if it qualifies as a designated entity and obtains approval of its long form application with respect to the auction.
"These acquisitions of spectrum in mid-sized markets will enable Leap to roll out our new Cricket concept bringing affordable, simple wireless communications to people in select markets across the United States," said Harvey P. White, chairman and CEO of Leap. In March, Leap and Chase Telecommunications Inc. launched the Cricket wireless service in Chattanooga, Tenn. under an agreement that provides ChaseTel's management controls the business until Leap's proposed acquisition of ChaseTel is complete.
The largest markets in which Leap agreed to acquire spectrum are Salt Lake City, Utah (1.3 million POPs), Little Rock, Ark. (852,000 POPs), Tulsa, Okla. (836,000 POPs), Albuquerque, N.M. (688,000 POPs), Tucson, Ariz. (666,000 POPs), Spokane, Wash. (612,000 POPs) and Wichita, Kans. (597,000 POPs). The complete list of Leap's acquisitions includes: Anchorage, Alaska; Blytheville, Fayetteville, Fort Smith, Hot Springs, Little Rock, Pine Bluff and Russellville, Ark.; Nogales and Tucson, Ariz.; Merced, Modesto and Redding, Calif.; Pueblo, Colo.; Boise, Idaho Falls, Lewiston and Twin Falls, Idaho; Coffeyville and Wichita, Kan.; Bozeman, Mont.; Fargo and Grand Forks, N.D.; Grand Island and North Platte, Neb.; Albuquerque, Gallup and Santa Fe, N.M.; Tulsa, Okla.; Salem, Ore.; Provo and Salt Lake City, Utah; Kenewick, Spokane and Yakima, Wash.; and Casper, Wyo. Note: These POPs are 1990 figures.
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Leap Wireless International Reports Results for Second Quarter
* Cricket and PEGASO Launches Exceeding Initial Expectations
SAN DIEGO, Apr. 14, 1999 -- Wireless communications carrier Leap Wireless International, Inc. today reported substantial progress in network deployment and subscriber growth during the second quarter of fiscal year 1999, ended February 28, 1999. By the end of the quarter, Leap's Mexican operating company, PEGASO PCS, had launched service and Leap's operating companies in the U.S. and Chile had reached approximately 32,000 subscribers. Leap's equity share is approximately 13,500 subscribers.
Subscribers at Chilesat PCS, Leap's Chilean operation, grew by 59% during the second quarter to 27,000 subscribers, despite funding issues related to the financial condition of Telex-Chile, Leap's former partner in the operating company. Subscriber numbers do not include PEGASO PCS, which launched commercial service in Tijuana on February 25, 1999.
In January 1999, Leap announced its planned acquisition of Chase Telecommunications, Inc. (ChaseTel), which launched service in Chattanooga, Tenn. last fall. Leap currently owns 7.2% of Chase Telecommunications Holdings, Inc., the parent corporation of ChaseTel. On February 1, 1999, in anticipation of the re-launch of wireless service in conjunction with Leap under the Cricket brand name, ChaseTel ceased selling conventional PCS service. ChaseTel had approximately 4,900 subscribers at that time.
In March, Leap and ChaseTel launched Cricket service in Chattanooga using the ChaseTel infrastructure and under an agreement that provides that ChaseTel's management controls the business until Leap's proposed acquisition of ChaseTel is complete. Targeted to the mass consumer market, Cricket lets customers make unlimited local calls for one low, flat monthly rate. The monthly rate, payable in advance, covers unlimited local calls, a voice mailbox and caller ID.
"The initial consumer response in Chattanooga to Cricket's simple, worry-free wireless service has substantially exceeded our expectations and tells us that we have a product that is in high demand and that we want to expand as quickly as possible. We hope to launch the Cricket concept in a second market by the fall of 1999," stated Harvey White, chairman and CEO of Leap.
Pending approval from the Federal Communications Commission (FCC), Leap will acquire ChaseTel licenses in Tennessee and AirGate licenses in North and South Carolina that will enable Leap to offer Cricket service in other markets. Leap is currently bidding in the federal government's re-auction of PCS spectrum and is exploring the possibility of acquiring additional U.S. spectrum outside of the auction process.
Subsequent to the end of the quarter, PEGASO announced that it had obtained a commitment for a $100 million working capital facility, bringing its total commitments to $1.1 billion in equity, debt and vendor financing. The facility is expected to complete the financing necessary to build out and launch PEGASO's network in Mexico's four largest cities-Tijuana, Mexico City, Monterrey, and Guadalajara.
"Launching commercial service in Mexico was a major milestone for Leap. We believe that PEGASO's 100% digital network, innovative service offerings, and strong marketing and distribution channels make it uniquely positioned to compete aggressively in the Mexican market," White said. "We are excited about the initial reaction in the market to PEGASO's service and expect the third quarter to be marked by strong subscriber growth in Tijuana and continued progress on the build-out of the network into Mexico City, Monterrey, and Guadalajara," Mr. White continued.
Also subsequent to the end of the quarter, Leap announced that it has signed an agreement to increase its ownership of Chilesat Telefonia Personal S.A. (Chilesat PCS) from 50% to 100%. In a $50 million transaction, Leap will purchase the remaining 50% of Chilesat PCS from Telex-Chile, a Chilean telecommunications company, and its affiliate, Chilesat S.A. Leap's purchase of Telex-Chile's interest resolves key issues for Chilesat PCS, which was experiencing short-term funding problems related to Telex-Chile's financial condition.
Upon completion of the acquisition, Leap will take steps to recapitalize Chilesat PCS, increase marketing efforts, and aggressively grow the business. The transaction is subject to certain conditions and is expected to close within a week.
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INTERVIEW-Taiwan to get U.S. cell phone standard |
