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Leap, MetroPCS sign multi-pronged deal covering roaming, litigation, spectrum

Deal hints at closer relationship between flat-rate carriers

September 29 2008 - 11:41 am ET | Dan Meyer | RCR Wireless News

Flat-rate, unlimited wireless carriers Leap Wireless International Inc. and MetroPCS Communications Inc. have thrown aside years of animosity and legal entanglements with a new roaming agreement, plans for a spectrum swap and a decision to resolve pending litigation between the two companies.

The companies said the new, 10-year roaming agreement will cover existing and future markets and allow their respective customers to access wireless services in each other’s markets at “a more attractive and competitive price.” Both operators, which rely on CDMA network technology, continue to have issues securing nationwide roaming agreements with nationwide operators at terms they consider fair.

Leap and MetroPCS also announced a spectrum deal that will see Leap acquire an additional 10 megahertz of spectrum in San Diego and Fresno, Calif., Seattle, and portions of Washington and Oregon. As for MetroPCS, the carrier will get an additional 10 megahertz of spectrum in Dallas/Ft Worth and other portions of Texas, as well as in Shreveport-Bossier City, La. and Lakeland-Winter Haven, Fla. Financial terms of the deal were not released.

Both carriers have begun rolling out more spectrum-intensive data services, and their need for more spectrum may be linked to such activities.

Finally, Leap and MetroPCS announced a settlement in their legal battle, which comes in the form of a cross-license agreement for intellectual property “held or applied for by either company.” While details of the settlement are sparse, it’s likely the detente is related to court action brought by MetroPCS against Leap claiming Leap was using business practices it gleaned when the two companies were discussing merger possibilities. The merger talks eventually faltered.

Analysts still expect Leap and MetroPCS to form some sort of stronger alliance — up to and including a merger. The last go-round ended in November when MetroPCS dropped its $5.1 billion public bid for Leap.




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