With its pending acquisition by AT&T set to close this month, Leap Wireless released what is likely its last report as an independent carrier on its operational performance. And from looking at the results, operations have been running thin for the one-time no-contract leader.
According to a 10-K report filed with the Securities and Exchange Commission, Leap said it lost $181 million during the fourth quarter, which was more than double the $74.3 million it lost during the final three months of 2012. The increased losses were connected with a near 10% decrease in revenues, which came in at $682.7 million for the fourth quarter of 2013.
For the full year, Leap said it lost nearly $641 million in 2013, which was more than three-times the $189.3 million the company lost in 2012, and was the fifth year in a row that Leap posted a full-year loss. Net revenues for 2013 also dropped nearly 8% year-over-year to just under $2.9 billion.
Leap’s financials were impacted by continued degradation in its customer base, as the carrier said it lost 745,300 customers in 2013, which followed the loss of more than 637,000 customers in 2012. Leap ended last year with just over 4.5 million total customers on its network. Customer growth was impacted by a steep drop in gross subscriber additions, which plunged nearly 35% in 2013, and followed a 22% drop in 2012.
Leap placed some of the customer losses on increased competition across the wireless space, with particular mention of T-Mobile US’ MetroPCS operations.
“In particular, we have been experiencing increased competition in many of our core Cricket markets from nationwide carriers increasingly targeting the prepaid segment, including from T-Mobile’s nationwide expansion of the MetroPCS prepaid brand utilizing the T-Mobile 4G LTE network,” Leap noted in its filing.
Leap also faulted higher pricing for its devices, poor returns on promotional activities and discontinuing some under-performing services likes it mobile broadband offering and PayGo prepaid service.
Leap earlier this year attempted to stem the flow of customers out of its operations by slashing the per-line price of it family plans. Results of those efforts will likely not be known unless AT&T releases operational results tied to Leap’s service.
Leap’s CEO Doug Hutcheson saw a direct impact of the carrier’s poor operational performance as his total compensation dropped from more than $5.3 million in 2012 to just under $4.3 million in 2013.
AT&T, which has seen its acquisition attempt delayed, has said it plans to keep Leap’s Cricket brand alive as a focus of its prepaid efforts. The carrier noted last year that it planned to fold its year-old Aio Wireless brand into the Cricket brand. However, the operational results over the past several quarters shows that reviving the Cricket brand could take some work.
The main attraction for AT&T looks to remain Leap’s rather deep spectrum holdings, which include 1.9 GHz and 1.7/2.1 GHz spectrum licenses covering approximately 137 million potential customers. AT&T is looking to begin adding 1.7/2.1 GHz spectrum support to its 700 MHz-based LTE service as well as eventually re-farming its 1.9 GHz holdings to support LTE services.
Bored? Why not follow me on Twitter?
