Leap Wireless International Inc. (LEAP) has teamed up with LightSquared to provide roaming service across Leap Wireless LTE 4G networks. Leap Wireless is expected to roll out its LTE 4G services within a few years.
Leap Wireless provides digital wireless communication services in the U.S., under the “Cricket” brand primarily through its wholly-owned subsidiary, Cricket Communications Inc. It remains as one of the low-cost wireless service providers in the U.S. The company serves the urban and suburban market and stays away from the less populated areas to manage its infrastructural costs.
The partnership with LightSquared will enable Leap Wireless to cover broader areas as well as provide better service to its customers at cheaper rates. Moreover, with the deployment of 4G networks, Leap Wireless will be able to support increased capacity across its networks, along with 4G network support from LightSquared.
Earlier, Leap Wireless entered into a 5-year roaming wholesale agreement worth $300 million with Sprint Nextel (S), through which its wholly-owned subsidiary, Cricket will offer its products and services.
Leap Wireless offers quality service plans to its customers at attractive rates. The company also plans to launch their LTE 4G service in the coming years. Recently, the company upgraded its service by offering latest smartphones and unlimited music download facility. Leap Wireless has also partnered with Sprint Nextel and LightSquared in order to provide better service to its clients.
Despite such positive traits, we remain cautious about Leap Wireless due to the huge competitive pressure from other carriers like AmericaMovil’s (AMX) Tracfone and MetroPCS (PCS), which also offers such attractive plans. Furthermore, with huge debts and poor financial results in the last quarter, we prefer to remain on the sidelines.
We, thus, maintain our long-term Neutral recommendation forLeap Wireless International Inc. Currently, Leap Wireless International Inc has a Zacks #3 Rank, implying a short-term Hold rating on the stock.
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