It was said earlier that AT&T will do something to make its network stronger. Leap Wireless might be the first step while going towards this goal. It was reported that AT&T reached an agreement with Leap Wireless worth $1.2 billion in cash. This prepaid wireless provider will become a part of AT&T in short period of time.
This carrier has agreed to pay off $15 per share for Leap Wireless that operates under Cricket brand. The deal will include Leap’s properties of its wireless network, stores, subscribers, network assets and all licenses. This provider will land 5 million subscribers to AT&T while the carrier keeps its Cricket brand. According to the released statement for this acquisition, the wireless network covers 35 states and more than 96 million people. The press release informed that AT&T will receive all financial resources, spectrum and scale to compete with other major providers. It will bring better experience with users interested in so called low-cost prepaid service.
AWS and PCS bands are also included into the purchase. They will fit right into AT&T’s spectrum and if the deal is approved, this carrier will put Leap’s spectrum for providing additional capacity and network performance for all customer’s internet usage. It will help the further 4G LTE deployment over users. Leap Wireless will have no difficulties being more compatible on the market with AT&T standing right behind them.
We saw this kind of acquisition by T-Mobile back in May when this carrier bought MetroPCS. Since then, this provider has become more compatible and started offering some high-end along with low-price mobile devices. T-Mobile used it to spread its no-contract plans and noted big improvements.
AT&T only waits the formal approval coming of Federal Communications Commission and the U.S Department of Justice. According to some sources, this subject has to be reviewed and it’s expected to be closed in 6 to 9 months. Leap Wirelesses’ stock price has been closed at $7.98, up 20c per share on Friday.
That’s how it is, big companies are purchasing smaller in order to gain bigger audience or to use their spectrum for sharing their network. It’s a win-win situation for both companies there is no doubt about it. We will see if this acquisition is approved and how this purchase will result in the upcoming period of time.
Share few thoughts about this in comments below.