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Leap adds 385,000 subscribers in Q4: Unlimited wireless provider reports 79,000 new subs for its mobile broadband service

Leap Wireless International Inc. said it recorded a solid final quarter for 2008, adding 385,000 new customers that contributed to an overall increase of 34% for the year.
The regional, flat-rate carrier announced that it ended the year with 3.84 million customers and saw growth in the fourth quarter in its existing and expansion markets.
The company, which owns Cricket Communications Inc., added 173,000 new customers in its existing markets and 133,000 in its expansion markets during the quarter. The remaining new customers, 79,000, signed up for Leap’s mobile broadband service, where customers pay a flat rate with no long-term commitment or credit checks. In the third quarter, the carrier added about 156,000 net customer adds.
Doug Hutcheson, Leap CEO and president, said in a statement that the company is pleased with the year-end results in the midst of a weakened economy.
“Strong performance in the company’s existing markets reflects the success of our market enhancement strategies, and our broadband customer additions were strong and within our guidance,” Hutcheson said. “Customer churn performed as we anticipated as customer tenure in our existing markets continue to increase.”
Hutcheson said sales during the holiday season met expectations and the company has been able to continue to add customers in a time of economic uncertainty.
“We believe we are well positioned for continued customer growth and operating margin improvement in 2009 as the business gains additional scale and continues to focus on cost reduction initiatives,” he said.
The company will announce its financial results for the final quarter next month. Leap is coming off a third quarter where the company posted a loss of $48.8 million.
The company also saw its stock decrease. In 2008, company stock was trading at $47 before falling to $26 per share. Today, Leap’s stock was trading at about $30 per share.
During the fourth quarter, Leap agreed to enter into a reciprocal roaming agreement with rival MetroPCS Communications Inc. With the agreement, the companies offer free roaming onto each other’s networks.
As 2009 unfolds, Leap officials said the company will continue to obtain roaming services from other carriers at cost-effective rates. The company also plans to increase its covered pops. At the end of the third quarter, the company had 32 million covered pops. It’s hopeful to expand to 36 million pops by this year and 50 million pops by 2010. Leap also plans to add 600 sites to its existing markets.
Ric Prentiss, Raymond James Equity Research analyst, wrote in a note today that Leap is “performing well from a customer and addition and retention perspective given the difficult macroeconomic environment.”

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