Leap stumbles as 200,000 customers jump ship and Q3 income drops by USD533.3 million

3 Nov 2010

US cellco Leap Wireless has reported revenues of USD565.2 million for the three months ended 30 September 2010, a 4.4% increase year-on-year. Operating income before depreciation and amortization (OIBDA) increased USD1.7 million to USD123.2 million for the third quarter, but operating losses jumped to USD478.1 million, compared to a profit of USD1.4 million in 3Q09. Net loss for the third quarter was USD533.3 million compared to USD65.4 million one year earlier. The company blamed the decline in income on the introduction of new, all-inclusive service plans, the elimination of reactivation and other fees, and changes in its dealer compensation structure.

In operational terms, Leap ended the quarter with 5.1 million subscribers. Although the figure represents a 9.3% increase year-on-year, it is a 3.8% drop quarter-on-quarter; the decrease marks the second successive quarter in which Leap’s subscriber base has fallen. The company lost a total of 199,949 customers during Q3, adding 116,182 year-on-year. Doug Hutcheson, Leap’s president and CEO, commented: ‘The company’s results reflect the significant transition of our business in the third quarter as we aligned our business to meet the changing needs of our customers and improve the company’s financial performance. We are now beginning to see the positive trends from this transformational work. … We are pleased with the improving trends we are experiencing after our business transition, and we are now focused on our strongest selling season of the year’.

United States, Leap Wireless International