Leap shows strong growth

Leap Wireless International Inc. plans to offer CDMA2000 1x EV-DO service in its markets by the end of 2007, and expects to introduce new prepaid products in the second quarter.
Company executives outlined those plans during a conference call with analysts after the company’s quarterly results were announced last week.
Al Moschner. Leap’s chief marketing officer, said that after offering its Jump Mobile prepaid brand for about a year, about 2 percent of the company’s customer base was prepaid. He said the company had learned from “divergent results by market” and observing prepaid customer behavior, and was incorporating its lessons into new prepaid products to be introduced in the second quarter.
Leap completed the majority of its EV-DO network upgrade during 2006, according to Leap’s chief technical officer Glen Umetsu, and the network was expected to be ready to offer EV-DO service in all Leap markets by the end of the second half. Launches are tentatively scheduled for the second half of the year.
Leap reported a net loss for the fourth quarter and full year 2006, while revenues increased. The carrier added 260,000 customers during the fourth quarter, news that helped send Leap’s stock up by almost 10 percent to $67.80 per share.
The regional carrier’s revenues for the fourth quarter totaled $314.5 million, up 37.4 percent from revenues of $228.9 million for the fourth quarter of 2005. Revenues for the full year came in at $1.14 billion, an increase of nearly 25 percent from $914.7 in 2005. Analysts were expecting revenues of about $316 million for the quarter and $1.14 billion for the year.
Net loss for the quarter was $39.4 million, a reversal of net income of $5 million during the fourth quarter of 2005. Net loss for the year was $4.1 million, down from a return of $30 million the previous year.
On the year, Leap added 592,237 net new customers, a significant increase from the 117,376 net adds it posted during 2005.
Leap said its churn rate was flat at 4.1 percent for the quarter and 3.9 percent for the year. ARPU was $44.68 for the quarter, up from $39.74 during the fourth quarter of 2005. ARPU for the year was $43.55, compared with $39.56 during 2005.
Leap executives the company could launch markets using its spectrum purchases from last year’s auction late in 2007 or early in 2008. They also indicated that about two-third of new customers are now gained through exclusive Leap channels, including retail stores and exclusive dealers.