Leap Completes Formation of Joint Venture to Provide Cricket® Service in Portland, Salem and Eugene, Oregon; Leap Also Closes Sale of Its Toledo and Sandusky, Ohio Markets to Cleveland Unlimited
SAN DIEGO — Leap Wireless International, Inc. (NASDAQ:LEAP), a leading provider of innovative and value-driven wireless communications services, today announced that it has completed its previously announced formation of a joint venture, LCW Wireless, LLC, with CSM Wireless, LLC and WLPCS Management, LLC, to provide Cricket’s style of high-quality, low-cost wireless service in Portland, Salem, and Eugene, Ore. Leap also announced that it has completed the sale of its Toledo and Sandusky, Ohio markets to Cleveland Unlimited, Inc., (CUI) which operates under the brand name Revol in markets throughout the Ohio and Indiana area.
In connection with these transactions, the Company sold its wireless licenses and operating assets in its Toledo and Sandusky, Ohio markets in exchange for $28.5 million and an equity interest in LCW Wireless, a designated entity which owns a wireless license in the Portland, Oregon market. Leap also contributed approximately $25 million to the Oregon joint venture and two wireless licenses and related operating assets in Eugene and Salem, Oregon, bringing the Company’s total non-controlling equity interest in LCW Wireless to approximately 73 percent. The remaining approximately 27 percent of the Oregon joint venture interests will be owned by CSM Wireless, which previously contributed its Portland spectrum license to the joint venture entity, and by WLPCS Management, which acquired its controlling interest in the joint venture for cash.
“We look forward to working with our joint venture partners on the build out of a promising new market cluster comprising the Portland, Salem and Eugene markets,” said Doug Hutcheson, president and CEO of Leap. “This new market cluster represents 3.2 million licensed POPs and presents a great opportunity for consumers seeking our unlimited wireless Cricket(R) and Jump(TM) Mobile services in the Portland, Salem, and Eugene, Ore. area.”
Under the Ohio sale agreement, Leap sold 15 MHz of spectrum in both Toledo and Sandusky, Ohio, comprising a total of 927,000 licensed POPs and 597,000 covered POPs, together with its operating assets in those markets. In connection with the sale agreement, Cricket entered into a network sharing agreement with CUI which will allow Cricket to provide customers with extended coverage calling options in the Midwest including Toledo, Cleveland, Columbus, Indianapolis and other markets. With the completion of this sale transaction, Leap and the joint ventures in which it has invested, Alaska Native Broadband 1, LLC and LCW Wireless, LLC, own wireless licenses covering an aggregate of approximately 71.9 million total potential customers.
Leap, headquartered in San Diego, Calif., is a customer-focused company providing innovative mobile wireless services targeted to meet the needs of customers under-served by traditional communications companies. With the value of unlimited wireless services as the foundation of its business, Leap pioneered both Cricket(R) and Jump(TM) Mobile service. Through its affordable, flat-rate service plans, Cricket offers customers a choice of unlimited local voice minutes, unlimited domestic long distance voice minutes, unlimited text, instant and picture messaging and additional value-added services over a high-quality, all-digital CDMA network. Designed for the mobile-dependent, urban youth market, Jump Mobile is a unique prepaid wireless service that offers customers free unlimited incoming calls from anywhere with outgoing calls at an affordable 10 cents per minute and free incoming and outgoing text messaging. Both Cricket and Jump Mobile services are offered without long-term commitments or credit checks. For more information, please visit www.leapwireless.com.
Except for the historical information contained herein, this report contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements reflect management’s current forecast of certain aspects of Leap’s future. You can identify most forward-looking statements by forward-looking words such as “believe,” “think,” “may,” “could,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “seek,” “plan,” “expect,” “should,” “would” and similar expressions in this report. Such statements are based on currently available operating, financial and competitive information and are subject to various risks, uncertainties and assumptions that could cause actual results to differ materially from those anticipated or implied in our forward-looking statements. Such risks, uncertainties and assumptions include, among other things:
–our ability to attract and retain customers in an extremely competitive marketplace;
–changes in economic conditions that could adversely affect the market for wireless services;
–the impact of competitors’ initiatives;
–our ability to successfully implement product offerings and execute market expansion plans;
–our ability to comply with the covenants in our senior secured credit facilities;
–our ability to attract, motivate and retain an experienced workforce;
–failure of our network systems to perform according to expectations; and
–other factors detailed in the section entitled “Risk Factors” included in our periodic reports filed with the SEC.
All forward-looking statements included in this news release should be considered in the context of these risk factors. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Investors and prospective investors are cautioned not to place undue reliance on such forward-looking statements.
Leap is a U.S. registered trademark and the Leap logo is a trademark of Leap. Cricket is a U.S. registered trademark of Cricket. In addition, the following are trademarks of Cricket: Unlimited Access, Unlimited Plus, Unlimited Classic, Jump, Travel Time, Cricket Clicks and the Cricket “K.” All other trademarks are the property of their respective owners.
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