Leap Starting Mexico>
Leap Wireless International Operating Company PEGASO
PCS Launches 1st Market of $1.3 Billion Wireless Network in
Mexico
PRNewswire
- Mexico's First 100% Digital Wireless Network
to Build Country's Telecom, Economy -
SAN DIEGO and TIJUANA, Mexico, Feb. 25
/PRNewswire/ -- Wireless communications
carrier [ Leap Wireless International, Inc. ]
(Nasdaq: LWIN) today announced that its
Mexican operating company, PEGASO PCS,
launched the first 100% digital wireless network
in Mexico. PEGASO, which plans a $1.3 billion nationwide network, today
made the ceremonial first wireless call on its system in Tijuana, one of the
fastest growing cities in Mexico. After Tijuana, it plans to launch in Mexico
City, Monterrey and Guadalajara in 1999 -- the country's four largest
economic centers. The PEGASO commercial launch, at a ceremony in
Tijuana, was attended by Carlos Ruiz Sacristan, Mexican Secretary of
Communications and Transportation; Alejandro Gonzalez Alcocer,
Governor of Baja California; and Javier Lozano Alarcon, president of
Cofetel, the Mexican Federal Communications Commission.
"We believe PEGASO will be successful because of its digital wireless
technology, user-friendly marketing plans and on-target distribution
strategy," said Harvey P. White, Leap's chairman and CEO. "PEGASO's
100% digital technology will protect customers from cloning. PEGASO will
offer customers simple pricing plans and billing, with no contracts required.
And it will reach customers through PEGASO's own stores, in-store
displays at retail chains, direct sales and telemarketing."
PEGASO expects to offer wireless local loop in addition to mobility service
in the future, as its licenses cover both. Teledensity the number of phone
lines per 100 people is only 9.7% in Mexico compared to 64% in the United
States. The Mexican government has pledged to add 9.5 million phone lines
in the next five years. While more than a quarter of Americans use wireless
phones, in Mexico, a country of nearly 100 million people, only 3.5% have
wireless phones. But wireless customers in Mexico grew an astonishing 90%
in 1998.
"The economies of the U.S. and Mexico are very tightly entwined," White
said. "Telecommunications infrastructure is imperative to support economic
growth in Mexico, and wireless is the fastest, most cost-effective way to add
new phone lines. PEGASO's nationwide digital wireless network is going to
infuse new strength into the economic muscle of Mexico."
In addition, PEGASO and Sprint PCS have signed the first 100% digital
U.S.-Mexico roaming agreement. The roaming agreement will enable
PEGASO customers to use the nationwide Sprint PCS network. Sprint
PCS customers will be able to roam automatically onto PEGASO's digital
network when they visit Mexico. In addition the agreement is expected to
offer calling plans that enable competitive cross-border wireless
communications in selected twin cities along the 2,000-mile U.S.-Mexico
border, starting with San Diego and Tijuana. With more than 4 million
people, the San Diego-Tijuana metropolitan region is home to the world's
busiest border crossing. There are 5.8 million border crossings into San
Diego from Mexico every month, and Tijuanans have spent billions of dollars
on shopping, recreation and tourism in San Diego in the last decade.
"This roaming agreement will give PEGASO's customers significant
advantages when they travel in the U.S. -- a simple, user-friendly way to
stay permanently connected," said Alejandro Diez Barroso, president of
PEGASO PCS. "In addition, Sprint PCS customers will be able to roam
automatically onto PEGASO's nationwide, digital network when they visit
Mexico." Roaming is expected to be available in the second quarter of
1999.
"This agreement is an important first step in blurring the border between San
Diego and Baja, creating communications to enhance business, government
and productivity," said John M. Eger, executive director of the International
Center for Communications, a San Diego organization that promotes
border-free communications. "But more importantly, it brings the two
peoples together in a way that no other innovation can."
The PEGASO network is backed by a consortium of shareholders from
around the world -- Leap, Citicorp Equity Capital Latin America, AIG- GE
Capital Latin America Infrastructure Fund, [ Nissho Iwai Corporation ] ,
Grupo Televisa, the world's largest Spanish-language media company, and
Grupo Pegaso, a privately held conglomerate. [ QUALCOMM Incorporated ] is
the largest supplier of infrastructure equipment for the network, providing
Qcell(TM) base stations and Qcore(TM) base station controllers, as well as
related program management and deployment services to PEGASO. Alcatel
is providing a wide variety of state-of-the-art equipment and services to the
PEGASO network, including towers, microwave transmission equipment,
switches, a billing system, and deployment services such as cell site
acquisition. PEGASO customers will choose from handsets manufactured by
QUALCOMM, Samsung, and [ Hyundai ] .
About PEGASO PCS
With a planned initial investment of approximately $1.3 billion, Pegaso is
deploying the first 100% digital network in Mexico. Pegaso plans to offer
nationwide PCS service, launching in the country's four largest cities in 1999,
starting with Tijuana at the end of February and moving on to Mexico City,
Monterrey and Guadalajara. The Pegaso network will be one of the largest
in the Americas. Having acquired the necessary licenses to offer mobile and
wireless local loop services nationwide, Pegaso expects to offer top-quality
service to a significant share of the Mexican market in the coming years.
About Leap Wireless International
Leap Wireless International, Inc., headquartered in San Diego, California, is
a wireless communications carrier that deploys, owns and operates wireless
networks in domestic and international markets with strong growth potential.
In conjunction with its strategic partners, Leap is building or anticipates
building a combination of fixed and mobile wireless solutions in Mexico,
Chile, Australia, Russia and the United States. The world is going wireless,
and Leap believes that CDMA is the technology of choice to increase the
teledensity that is critical to economic growth. For each of its ventures, Leap
is actively involved in management of the systems, combining its experience
in international markets with its wireless technical expertise in CDMA. Leap
is dedicated to bringing the benefits of reliable, cost-effective and
high-quality voice and data services to domestic and emerging markets. For
more information, please visit the company's web site at
leapwireless.com .
This news release contains certain "forward-looking statements," including
statements regarding the future scope of PEGASO's wireless network.
Forward-looking statements, which are based upon certain assumptions and
describe future plans, strategies and expectations of the Company, are
generally identifiable by use of the words "believe," "expect," "intend," "plan,"
"anticipate," "estimate," "project" or similar expressions. The ability of the
Company to predict actual results and other future events is inherently
uncertain. Important factors which may cause actual results to differ
materially from the forward-looking statements contained herein or in other
public statements by the Company are described in the section entitled "Risk
Factors" in the Company's 1998 10-K, most recent 10-Q and other
documents on file with the Securities and Exchange Commission. Those
factors most likely to cause actual results to differ include but are not limited
to: the currency exchange and economic risks associated with Mexico,
uncertainties regarding Leap or PEGASO's ability to access the capital
markets, the delayed build out of the PEGASO network, failure of the
PEGASO network to perform according to expectations, and competitive
pressure that could affect market demand for PEGASO's services.
SOURCE Leap Wireless International, Inc.
(Copyright 1999)
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