AT&T to buy leap wireless for 1.2B $

AT&T on Friday announced that it plans to buy mobile carrier Leap Wireless for about $1.19 billion in cash, or $15 a share. The deal would give the telecom giant more spectrum and the Cricket prepaid phone franchise. Leap Wireless International Inc, the pre-paid cellphone carrier that operates under the Cricket brand, purchase would gives the nation's No. 2 cellphone carrier, AT&T, a leg-up in serving customers who prefer not to have lengthy contracts.  Leap's Cricket service has 5 million subscribers who pay monthly without a contract. The deal also gives AT&T the right to use Leap's unused airwaves - also known as spectrum - to expand its network. Charles Golvin, a technology analyst with research firm Forrester, said Leap's spectrum holdings will allow AT&T to offer more of its customers faster, more reliable wireless data in congested areas. "Having more spectrum means having more capacity and being able to meet those long-term data demands," Golvin said. "Just like you can never be too thin or too pretty, you can never have too much spectrum." As part of its deal, AT&T plans to keep the Cricket brand name, but provide Cricket customers with a broader range of devices and give them access to AT&T's "4G LTE" high-speed wireless network. AT&T says it plans to expand Cricket's presence in the US. As of March, AT&T had 7.1 million pre-paid customers through its GoPhone and Aio brands. AT&T has 107 million wireless customers in total. "The pre-paid market for us is relatively untapped," said AT&T spokesman Brad Burns. "From a competition perspective, this creates a much healthier competitor in the pre-paid space." AT&T will buy all of Leap's stock and wireless properties, including licenses, network and retail stores. Leap's unused spectrum covers portions of the country that include 41 million people. The companies said owners of nearly 30 per cent of Leap shares have agreed to vote in favor of the deal. Leap, based in San Diego, had $2.8 billion of debt. "Senior management looked at (the acquisition by AT&T) as our best path forward for the company's long-term success," Leap spokesman Greg Lund said. AT&T said it expects the deal will close in six to nine months, although it requires approval from the Federal Communications Commission and Department of Justice. Federal regulators have been averse to permitting larger carriers to merge.