Just over 5 years ago the American mobile landscape was comprised of a multitude of regional giants. Then they started to merge. Carriers other than the big 4 seem to be a dying breed these days. With LTE spectrum at a premium, you’re starting to see another round of mergers and acquisitions. Sprint got its hands on all of Clearwire, T-Mobile gobbled up MetroPCS, and now AT&T has its sight set on Leap Wireless and its prepaid brand Cricket.
Under the deal, AT&T would acquire all of Leap’s shares and thusly all of Cricket’s assets. The prepaid carrier would then operate as a division of AT&T Wireless. The price would be $15 a share which works out to $1.2 billion give or take. The company also has $2.8 billion in debt. It is not known whether AT&T would take this on as a condition of the sale.
Leap/Cricket currently has 5.9 million subscribers. More importantly for AT&T, it has LTE spectrum in the AWS band and PCS spectrum currently running its CMDA/EV-DO network. It also has 700 MHz block A spectrum, but that will be sold off during the acquisition. When asked, Cricket referred me to AT&T (who has not yet responded) on plans for the spectrum and the customers. Based on the T-Mobile/PCS merger, it would be highly likely these customers would be transitioned to AT&T’s GSM network once the merger is complete. The Cricket spectrum could then be refarmed and incorporated into AT&T’s network. It should also be noted that Cricket has roaming agreements with Sprint and its subsidiary Clearwire. It is not known how they will be affected.
Remember, this is an agreement at this stage, so nothing is set in stone. It has to be approved by both Federal regulators and shareholders. The process could take nearly a year to complete. So, are you a Cricket customer? What do you think this proposed takeover? Post a comment below or interact with out on Google+, Twitter, or Facebook.
Source: AT&T Press Release.