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Leap Wireless looks for US buyer
02 February 2010
US operator Leap Wireless, which sells under the Cricket brand, has appointed advisers to seek a buyer
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Leap Wireless
Cricket
CDMA
Goldman Sachs
Morgan Stanley
Verizon
Sprint
AT&T
T-Mobile
Comment: There’s little so depressing as being the seventh operator in a highly competitive market, when numbers one, two, three and probably four are investing heavily in the next generation of technology and services. Leap is a CDMA player in a market where the biggest — Verizon Wireless — is moving over to the GSM family for its 4G technology and the number two CDMA player, Sprint, is investing in WiMax via Clearwire. Where does that leave Cricket and its owner, Leap? Batting on a sticky wicket, probably.
Leap Wireless, the seventh largest mobile carrier in the US, is intending to sell the company or merge with its rivals.
The cellular provider, which operates under the Cricket brand in the US, has appointed Goldman Sachs and Morgan Stanley to advise on the sale. Leap has also formed a committee — including board members John Chapple, Ronald Kramer and William Roper — to assess strategic options.
MetroPCS Communications, AT&T and Verizon Wireless are considered potential buyers for the company. América Móvil and Deutsche Telekom’s T-Mobile USA may also be interested.
However Leap — which span out of Qualcomm in the late 1990s — is a CDMA operator, which would make it a better fit technically for MetroPCS or Verizon Wireless than AT&T and T-Mobile, which both use the GSM family in their networks.
In 2007 MetroPCS offered $5.5 billion in stock for Leap, but the company rejected the offer. Leap is now worth about a fifth of that sum. GTB