Leap Wireless’ customer base shrinks 10.7% in 2012

21 Feb 2013

US cellco Leap Wireless has reported that its total number of customers decreased by 10.7% to 5.297 million in the twelve months ended 31 December 2012, having posted a net loss of 337,000 users in the fourth quarter. The operator said the reductions reflected discontinued sales of its daily ‘PAYGo’ product to new customers in October 2012, a narrowing of its focus in national retail to fewer, more productive retailers and locations, and ongoing de-emphasis of its broadband service. 59% of Leap’s new handset sales in Q4 2012 were smartphones and approximately 10% of its voice customer base upgraded their handsets during the quarter.

Service revenues for October-December 2012 were USD700.2 million, a 4.0% decrease over the comparable period of the prior year, primarily due to lower gross additions and an increase in overall churn. Quarterly ARPU was USD42.73, an increase of USD0.64 year-on-year, reflecting fewer retention programmes, the reduction in PAYGo customers and an improved percentage of users on higher-value service plans. Adjusted OIBDA for 4Q12 was USD148.2 million, an increase of 9.7% y-o-y, primarily driven by improvement in device subsidy and operating costs, partially offset by lower revenues related to net customer losses.

Fourth-quarter CAPEX was lowered to USD62.8 million, while total CAPEX for 2013 is expected to be between USD275 million and USD325 million, including up to USD100 million earmarked for LTE network technology. 2012 saw commercial LTE launches in Las Vegas, Philadelphia, Phoenix, Houston, San Antonio and South Texas, and Leap’s 4G service now covers approximately 21 million POPs across eleven markets. The company is considering strategies including infrastructure partnerships to cover up to approximately ten million additional POPs with LTE in 2013, while it recently entered into a national LTE roaming agreement.

United States, Leap Wireless International