Leap backwards

6 Aug 2008

Cellco Leap Wireless International has reported a surprise second quarter loss, with revenues from subscriber growth failing to offset increased spending on new initiatives and network expansions. Analysts had been expecting a slight profit for the three months to the end of June but the firm posted a net loss of USD26.1 million compared with a profit of USD9.6 million a year earlier. The firm says it looking for more long-term gains from its recent launches in new markets which are home to approximately eight million people: ‘We anticipate significant improvements in long-term customer penetration and the resulting financial contributions from these key investments over time,’ said Doug Hutcheson, Leap’s president and chief executive officer. The network expansions boosted revenues by 19.4% to USD474.9 million, though this too was below analyst forecasts. The company added over 171,000 net new customers in the quarter, though average revenue per user fell by almost 2% to USD43.97. Leap had 3.31 million subscribers at the end of June, up 24% year-on-year.

United States, Leap Wireless International