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

To: Jeff Vayda who wrote (207)	3/17/1999 4:29:00 AM
From: djane	Read Replies (1) \| Respond to of 2737

WSJ. Leap Wireless Plans Flat Rate For Cellular-Phone Customers March 17, 1999 By NICOLE HARRIS and STEPHANIE N. MEHTA Staff Reporters of THE WALL STREET JOURNAL Leap Wireless International Inc. plans to offer a flat-rate "all-you-can-talk" billing option to some of its cellular-phone customers. Analysts called the strategy a bold move to persuade consumers to choose cell phones over traditional telephones. Leap, which last year was spun off from Qualcomm Inc., is a tiny player in the cellular industry, with about 20,500 subscribers. The San Diego company has agreements to acquire wireless licenses in Tennessee and the Carolinas, as well as in several foreign countries. The new service will enable customers to make unlimited local calls for $29.95 a month. The service, to be marketed under the brand name Cricket Communications, targets the majority of cell-phone users, who only use their phones in their local calling area. Leap isn't the first U.S. wireless carrier to offer unlimited local calling. Powertel Inc., a small carrier based in West Point, Ga., a few years ago ran a $50-a-month, unlimited local calling promotion to attract new users. The plan, however, was never intended to be permanent. It seems unlikely that big, national carriers such as AT&T Corp. and Sprint PCS Group will respond with all-you-can-talk local plans. The carriers already offer national flat-rate pricing plans that give customers a "bundle" of minutes, good for local or long-distance calls. These plans are aimed at frequent travelers. Still, an unlimited local calling plan may appeal to wireless users who never "roam" out of their home territory and don't make many long-distance calls. "That plan is pretty compelling," said Steven Yanis, a wireless analyst with NationsBanc Montgomery Securities. "It will be a stone in AT&T's shoe." Leap will launch its plan Wednesday in Chattanooga, Tenn., and says it will roll out the service in other small to midsize markets such as Knoxville, Tenn., in coming months. The simplified billing option is an attempt to attract users who want to take the guesswork out of their monthly bills. Typical calling plans lock customers into a set amount of minutes for a monthly fee. If customers go over their allocation, they pay extra. Prepaid options that allow customers to plunk down a monthly fee in advance limit the amount of available airtime. "We want people to think of their wireless phones as a basic telephony service," said Harvey White, Leap's chief executive. Matthew Hoffman, an analyst at Dataquest Inc. in San Jose, Calif., said the pricing may be enough to persuade consumers to cut the cord to their landline telephones. Dataquest research shows that 30% of consumers are willing to switch to wireless from their landline phones if the costs are about $30 a month. The fledgling company will have to ensure that it can handle the additional traffic. During a trial, Leap learned that customers talked more often and longer on their cell phones than they did on landline phones. Mr. White said Leap will have adequate capacity. Return to top of page \| Format for printing Copyright © 1999 Dow Jones & Company, Inc. All Rights Reserved.