SAN DIEGO, Calif.—Leap Wireless International Inc. saw a big jump in customer additions during the third quarter, gaining 161,000 new subscribers and reporting a 73-percent improvement in gross additions.
Leap had gained just 23,000 net new customers in last year’s third quarter. The company also trimmed its churn rate from 4.4 percent in 2005’s third quarter to 4.3 percent for the third quarter of 2006.
“Our third-quarter customer growth reflects the strong acceptance we are seeing across our new markets for our services and is a significant improvement from last year,” said Doug Hutcheson, Leap’s president and chief executive officer.
Hutcheson added that new market launches in Austin, El Paso, Colorado Springs, Cincinnati, Houston, San Antonio and Kansas City had been rolled out on time and at or under budget. The carrier also plans to being serving Portland, Ore., soon.
Leap’s customer base is nearly at the 2 million mark. The flat-rate carrier plans to announce the rest of its operating results during the week of Nov. 6.
In a separate announcement, Leap said that it plans to sell $750 million in senior notes to institutional buyers, which will be used along with cash from a forward stock sale to repay money from an $850 million bridge loan that Leap set up to fund its purchases in the recent Federal Communications Commission spectrum auction. Leap said the bridge loan debts will be incurred to pay for the spectrum Leap and Denali Spectrum License L.L.C. won in the FCC’s auction, and to finance network buildout and initial operating costs. Payments for the auction are due Oct. 19.
Leap spent $710 million on licenses and Leap-backed Denali landed one regional license for $365 million, bringing the carrier’s total to nearly $1.1 billion. The carrier recently outlined plans for a buildout that would be mostly completed by 2009.
