Leap Wireless is set to lose its COO at the end of the month, with the no-contract wireless operator stating it has no plans at the moment to replace the position.
The carrier noted in a Securities and Exchange Commission filing that Raymond Ramon would leave the company effective July 13, with his employment terminated officially on July 31. As part of the agreement, Ramon will receive a cash payment of $495,000. Ramon will continue as an advisor to the carrier through the end of the year at the rate of $45,833 per month and also be eligible to receive a year-end bonus of up to $220,000 depending on performance.
The filing also noted that Leap will pay for Ramon’s relocation from his current residence in Denver to Chicago. Ramon is also subject to a three-year confidentially agreement following the end of his consulting services.
Analysts have noted that Leap Wireless, along with rival MetroPCS, have come under greater operations pressure due to competitors putting stronger emphasis on the no-contract space. Most note that the contract customer space has hit its saturation point, with carriers now actively trying to lure no-contract customers from rivals. Leap recently added Apple’s iPhone to its device portfolio, though analysts have been cautious on the move as the carrier is selling the iPhone at a substantial premium compared to contract offerings. Leap is also in the midst of rolling out LTE services across its network in order to remain competitive in the fast growing mobile broadband space.
Leap late last week altered its mobile broadband pricing plans for wireless modems by dropping the price of its entry-level plan from $45 per month for 2.5 gigabytes of service at unimpeded data speeds to $30 per month for 2 GB of service; its mid-tier plan from $50 per month for 5 GB to $45 per month for 4 GB; and adding 500 megabytes to its high-end $65 per month plan so it now includes 8 GB of non-throttled data speeds. Analysts noted the moves aligned the carrier’s offerings more with recent moves by no-contract rivals. Leap had previously scaled back the aggressive pricing on its mobile data plans as strong customer usage of the initial flat-rate “unlimited” offerings placed a heavy impact on the carrier’s network resources that it was looking to reserve for more lucrative smartphone users.
Leap’s stock (LEAP) was under pressure earlier this year following higher than expected costs associated with smartphone sales during the first quarter. The carrier is expected to release second quarter results in early August.
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