AT&T Plans to Buy Leap Wireless for $1.2 Billion

On Friday, wireless titan AT&T announced that is it planning to acquire San Diego-based Leap Wireless International. Leap Wireless is best known for its Cricket brand that delivers prepaid mobile services. The estimated amount AT&T is expected to pay in order for this deal to push through is $1.2 billion. According to AT&T, it would also assume the $2.8 billion that Leap has incurred on net debt.

The deal is expected to come through within six to nine months given the need for the approval of the U.S. Federal Communications Commission and Department of Justice, one of the pre-requisites of the deal.

Another addition to the AT&T family

With over 107.3 million wireless customers, AT&T is considered to be one of the biggest wireless providers in the United States. It has catered to satisfied consumers by providing top notch service, fast and efficient wireless technology, and a mobile experience that suits daily needs. AT&T has managed to compete with its rival companies by acquiring small companies. Leap Wireless is to be the latest addition to the growing AT&T family.

With over 5 million subscribers, the contribution of Leap to AT&T is comparatively small. Even though it will only add 5 million to the vast empire AT&T had already established, Leap’s coverage of 137 million licenses across the United States is still quite overwhelming. According to AT&T officials, Leap has yet to unveil its untapped potential, and they will surely utilize its hidden resources to expand the company’s LTE development.

Benefits of Leap subscribers

The acquisition of Leap by AT&T does not mean that its assets will be totally liquefied. AT&T declared that most of Leap will be kept intact. Nevertheless, upgrades will surely be implemented. For instance, Leap’s Cricket brand did not kick off as well as intended. AT&T stated that the Cricket brand would be further developed in order for consumers to have access to inexpensive prepaid plans that have enhanced mobile Internet capabilities.

Since both Leap and AT&T operate under 4G LTE networks, Leap subscribers are in for a nice surprise. According to AT&T, they will be giving LTE access to Leap subscribers but the “when” and other juicy details are still unknown.

GSM and CDMA

The evolution of mobile technology is approaching its peak, pushed onward by the ever changing ways by which people communicate and interact. 3G network is still being used even though 4G LTE is the preferred choice these days. Leap is still using CDMA system for its 3G connection while AT&T is already on a GSM-based system. AT&T said that it plans to replace Leap’s CDMA system and pattern it after the GSM, which it currently uses. The date is still unavailable as to when such change shall take effect.

More new acquisitions

Other wireless companies such as SoftBank and Sprint also made a deal for $21.6 billion. The said deal also gave Sprint the opportunity to absorb Clearwire. T-Mobile on the other hand assumed custody of MetroPCS which is also a regional budget carrier.

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