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Technology Stocks : Leap Wireless International (LWIN) -- Ignore unavailable to you. Want to Upgrade?

To: Dennis Roth who wrote (1985)	5/3/2002 12:55:22 PM
From: Dennis Roth	Read Replies (1) \| Respond to of 2737

Leap to gear down, refocus operations signonsandiego.com By Bruce V. Bigelow UNION-TRIBUNE STAFF WRITER May 3, 2002 Leap Wireless is finished building out. Now it's settling in. After taking on almost $1.9 billion in debt to launch its flat-priced wireless service in 40 cities, Leap said yesterday it has reorganized its business to concentrate on improving operations in its existing markets. The move was expected, because Leap's winning bids for wireless licenses in 22 additional markets are ensnared in a legal challenge that NextWave Communications has taken to the U.S. Supreme Court. Harvey White, Leap's chairman and chief executive, cited "uncertainties" surrounding the government's 2001 wireless spectrum auction as a factor in Leap's decision to refocus its operations. The shift means the San Diego company will eliminate 50 jobs nationwide or about 3 percent of its overall work force as it gears down from a growth strategy to running what it has. The cuts followed the elimination of 30 workers during the first three months of the year. Five of the latest cuts were at Leap's headquarters in San Diego, said Sarah Thailing, a company spokeswoman. It also means that moving trucks won't be hauling Leap's trademark lime-green couches into any more cities. The overstuffed couches, which are part of the company's marketing campaign, were last hauled to Buffalo, N.Y., for a snowy February launch of Cricket service in Leap's 40th market. The company's appeal is based on its low-cost approach: Customers pay a flat monthly rate of $32.95 for unlimited local calling. In a statement released yesterday afternoon, Leap said the job cuts will cost about $860,000 in the current quarter, which ends in June. The company expects the cuts will enable Leap to save $3 million by the end of this year in addition to $3.6 million in expected savings from earlier reductions. "This is beautiful," said Greg Gorbatenko, an analyst with Loop Capital Markets, who predicted last night that investors would react favorably to the news. "They're gearing down to more of a slower pace, and the market is rewarding financial discipline and efficiency." Loop Capital has no underwriting business with Leap, he added. In its first-quarter financial results, Leap said it now has more than 1. 3 million subscribers and remains on course to increase its customer base to 1.5 million by the end of June.