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

To: Jon Koplik who wrote (2214)	6/15/2002 11:25:36 PM
From: Jon Koplik	Read Replies (1) \| Respond to of 2737

Leap Wireless Fraud -3: Chargebacks Down 80% Since Jan DOW JONES NEWSWIRES Leap Wireless expects EBITDA to be positive by the fourth quarter and the company expects to have two million customers by the end of the year. Leap Wireless said it completed implementation of the fraud-detection measures in April. The company said credit-card-transaction chargebacks are down almost 80% since January, and Leap Wireless said it now believes its results are consistent with industry standards. This type of fraud decreases reported service revenue and average revenue per user, or ARPU, because revenue associated with chargebacks is reversed out in the month the chargeback is received. Leap Wireless said it believes its measures to prevent subscription fraud prevented the activation of, or otherwise cleared from its system, more than 20,000 customers potentially involved in fraud in the second quarter. This type of fraud decreases reported service revenue and ARPU due to the free month of service provided to these customers. Leap Wireless also believes that almost all the customers involved in fraud at the end of the first quarter were removed from its system or turned into paying customers because nonpaying customers automatically are removed from its system after 30 days. By reining in distribution fraud, Leap Wireless eliminated about 15% of its indirect sales locations that were underperforming or suspected of potentially fraudulent activity. Distribution fraud increases the amount of equipment subsidy reported and cost per gross addition because Leap Wireless, like other wireless carriers, sells its handsets at a loss and gives market development funds and volume incentives to its indirect dealers. The company also instituted more timely and targeted dealer performance and inventory monitoring systems that provide near-real-time reporting. Updated June 13, 2002 8:10 a.m. EDT Copyright © 2002 Dow Jones & Company, Inc. All Rights Reserved