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To: JGoren who wrote (24582)	3/21/1999 6:32:00 PM
From: Ruffian	Respond to of 152472

CNNFN> Leap Wireless CEO, CNNfn FDCH CEO Wire/Associated Press THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED. STEVE YOUNG, CNNfn ANCHOR, DIGITAL JAM: Leap Wireless (Company: [ Leap Wireless International Inc ] ; Ticker: LWIN; URL: leapwireless.com) is looking to leap frog its competitors. This week the wireless phone company announced an ambitious calling plan with a fixed rate for all wireless and local calls, but (20:13:10) analyst say other telcos may not copy the Qualcomm (Company: [ Qualcomm Incorporated ] ; Ticker: QCOM; URL: http:www.qualcomm.com) spin-offs bold gambit. Joining us now to explain the move is Leap's CEO, Harvey White. He comes to us from San Diego California. Welcome to DIGITAL JAM. HARVEY WHITE, CEO, LEAP WIRELESS: Thanks for having us. YOUNG: Nice to have (20:13:20) you with us. You're doing here it seems in a way what AOL (Company: [ America Online Inc. ] ; Ticker: AOL; URL: aol.com did going to flat pricing. In your case $29.95, right? WHITE: Correct. For all the calls that you would make in your local (20:13:30) trading area and receiving all the calls that you get unlimited usage in that market. YOUNG: You say local trading area. Do you mean a metropolitan city or the state or (20:13:40) just how does it work? WHITE: No. It's basically the city, the metropolitan area around the city we launched and the service is called Cricket and it was launched in Chattanooga. The first market (20:13:50) on St. Patrick's Day. Our color is green. So, why not St. Patrick's Day. And so anywhere in greater Chattanooga and it is for people who live work and play in that area and find that the (20:14:00) complexities of traditional cellular and PCS have caused them concerns about controlling their cost and about the complexity of understanding all the various pricing plans and they (20:14:10) really just want to have basic telephony with mobility added to it. YOUNG: What is this? I mean is this cellular? Is this PCS? WHITE: No it's neither cellular nor PCS nor is it land line. It's a whole (20:14:20) new things. It's basic telephony where you live work and play with mobility added unlimited with a fixed price. It's you pay in advance at the beginning of the month (20:14:30) for your service for the next month just like you would your cable bill or something else like that and you can control what you're going (20:14:40) to do and you get to use it anywhere. YOUNG: I'm just trying to understand, Harvey, what the technology is all about. If it's not as we presently understand cellular or PCS what kind (20:14:50) of wireless communication is it? WHITE: It's wireless communication. It is from a equipment standpoint it looks like a cellular or a PCS system in terms of the infrastructure the hand sets (20:15:00) will look the same. But in terms of the market segment and the people that we're approaching it's at best an undeserved market and perhaps an unserved market. We aren't (20:15:10) looking for the high end, the highly mobile user. You can't roam on this system. If you want to drive up and down the road to Knoxville to Chattanooga this isn't the system (20:15:20) for you, but what we found in our - all our focus groups and in our studies was that while 80 some odd percent of the people would like (20:15:30) to have wireless that a large percent of those people were very concerned about the complexities and the fear. They all had horror stories to tell about their (20:15:40) friend that was in a bucket plan of some sort and at the end of the month the bill was not $30, but was $90 and that was, they (20:15:50) said that's not what they wanted. They want the comfort. It's comfortable wireless of knowing that it's going to be $29.95 at the end of the month. They're going to talk anywhere in (20:16:00) that area where they live work and play and they're going to talk as much as they want to and get as many calls as they (20:16:10) want to. YOUNG: What happens if one of your customers carrying this digital thing, which I think is selling for $99.99 or something like that. WHITE: The phone you pay $99.95 for the phone and then (20:16:20) you. YOUNG: OK. I'm out in the city, Chattanooga and after a month or three of making local calls I have to make a long distance call. How does that work? WHITE: Well, you can have a pre-paid (20:16:30) long distance service that is an addition to this and so you determine ahead of time what it is you would like to do for your (20:16:40) long distance. So, there is long distance option. YOUNG: Well, what kind of arrangement do you have with which company? Who's the carrier? WHITE: Right now the carrier for our long distance is Cable & Wireless and we're continuing (20:16:50) to look at the various options that will make that service even more user friendly and more easy to use. Right now it's a pre-paid system, pre-paid calling card (20:17:00) type system and we want to enhance the user friendliness of that system over time. YOUNG: This sounds like the kind of entrepreneurial thing that might interest Bernie Ebbers. Have you been (20:17:10) talking at all to [ MCI ] WorldCom (Company: MCI WorldCom Inc; Ticker: WCOM; URL: mciworldcom.com)? WHITE: Not about this particular product in any - we've talked to a lot of people. It is. I think one of the things we have been able to (20:17:20) do is to start with a clean sheet of paper, look at this market, decide how to bring this cost effectively to the consumer, package it for something that (20:17:30) we find a lot of people would like to have and I think it is indicative of a company like Leap, which is a small entrepreneurial company that (20:17:40) we are ahead and willing to move out. And basically what we're doing is realizing the intent of the 1996 Telecom Act. We're going to create competition in the local market in (20:17:50) a cost effective way. YOUNG: Just as a point of reference how many wireless players are there now in Chattanooga? WHITE: There's four, I think, four or five in the market and one that's about (20:18:00) to launch into the market. YOUNG: I'm sure that's not why you went into this business, but do you think your appearance is going to force the others to bring (20:18:10) their prices down? WHITE: Well, you know, it's - certainly we think that all the pricing in the market is going to obviously get better. Technology supports it, volume support it, but again it is (20:18:20) a different cost model. We, for example, don't need to string bay stations between Chattanooga and Knoxville that aren't heavily used and we don't have to include that cap-X cost into the (20:18:30) cost of the monthly service. You know, all those kinds of things that change how people can deliver the service and we believe that by starting with a clean (20:18:40) sheet of paper and not having an existing system, a me too system that we're trying to strip down, but rather than looking at it saying this is (20:18:50) a market they're a lot of people that deserve the ability to communicate with mobility and put a cost structure together to do that, then we will (20:19:00) get the kind of penetration and service levels that will make this a very, very good business for us. YOUNG: OK. Harvey, thanks very much for joining us. WHITE: Thank you for asking. YOUNG: We're delighted to (20:19:10) have you and I'm sure lots of telecoms will be watching to see how you do. Thank you. WHITE: Hope so. END