Leap year for AT&T: takeover clears FCC hurdle

14 Mar 2014

The Federal Communications Commission (FCC) has finally approved AT&T’s USD1.19 billion acquisition of San Diego-based Leap Wireless, which offers pre-paid services under the ‘Cricket’ brand. In order to pave the way for the transaction, AT&T has made voluntary commitments, including spectrum divestitures in certain markets, which will help ensure that its competitors have access to frequencies. AT&T has also made commitments to deploy Long Term Evolution (LTE) technology using unused Leap spectrum within 90 days – or twelve months of the deal closing – which will ensure that that spectrum is being deployed correctly. AT&T has also pledged to roll out LTE services in six specific markets in south Texas within 18 months.

Going forward, AT&T has vowed to retain the Cricket brand and compete aggressively on price in the pre-paid market using the established brand. AT&T plans to deploy LTE services on Leap’s unused AWS and PCS spectrum licences shortly after the deal closes. Further, the carrier plans to mothball Leap’s CDMA network within 18 months of the deal closing, with a view to refarming the spectrum for LTE.