Leap Wireless Gains Momentum in Q3, First LTE Deployment Later this Year

Leap Wireless reported Q3 revenue of $717.3 million, up 19.4% over the same period last year. Adjusted operating income before depreciation and amortization (OIBDA) for Q3 was $154.3 million, a 25.2 percent increase over the third quarter of 2010.


Leap Wireless saw 666,000 gross customer additions for the quarter, ending the period with 5,755,000 customers. The company also reported approximately 666,000 gross customer additions for the quarter. The Company also reported a net gain of approximately 73,000 voice customers and a net loss of approximately 64,000 broadband customers, resulting in a net gain of approximately 10,000 customers, compared to a net loss of approximately 200,000 customers in the third quarter of 2010. Churn for the quarter was 3.8 percent, down from 5.5 percent for the third quarter of 2010. Third quarter voice churn was 3.4 percent, down from 5.2 percent for the third quarter of 2010.


"Our third quarter results reflect the benefits of the devices, service plans and nationwide 3G voice and data network coverage that we have introduced," said Doug Hutcheson, Leap's president and chief executive officer. "Our voice net additions improved by more than 245,000 customers year-over-year, reflecting continued improvements in gross customer additions and voice churn of 3.4 percent, a 180 basis point improvement year-over-year. In addition, ARPU increased to $41.25, reflecting the adoption of smartphones and Muve Music™ devices and related service plans by a third of our voice customers.


Leap Wireless also confirmed plans to deploy LTE across approximately two-thirds of its current network footprint over the next two to three years, with a commercial trial market scheduled to be launched in late 2011. The Company plans to cover approximately 25 million POPs with LTE network technology in 2012. Aggregate capital expenditures for LTE deployment are expected to be less than $10 per covered POP, excluding capitalized interest.


The company noted that its operating markets have an average of 23 MHz of spectrum, including an initial reserve for LTE.
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