Go ahead and put a bow on it, as Verizon Wireless and Leap Wireless (the parent company of Cricket), have announced a successful spectrum swap. The agreement follows the recent stamp of approval from the FCC, which was issued as part of a larger deal between Verizon Wireless, SpectrumCo and Cox. For its part, Leap will divest itself of excess AWS and PCS spectrum across the US; in exchange, Verizon will pay $120 million to Leap and provide it with 12MHz of A Block 700MHz spectrum in Chicago. Leap will use the new holdings to supplement its existing 10MHz of the A Block within the Windy City, and will use the cash to build up its LTE infrastructure across the US. The company currently expects to provide LTE coverage to at least two-thirds of Cricket's current footprint over the next three years -- or, maybe sooner. Just check the PR to watch the company waffle.
Leap Announces Closing of Spectrum Transactions with Verizon Wireless
SAN DIEGO, Aug. 28, 2012 /PRNewswire/ -- Leap Wireless International, Inc. (NASDAQ: LEAP), a leading provider of innovative and value-driven wireless communications services, today announced that it has completed the previously announced transactions to sell Verizon Wireless excess PCS and AWS spectrum in various markets across the U.S. and to acquire from Verizon Wireless 12 MHz of 700 MHz A block spectrum in Chicago. Upon the resolution of interference issues related to 700 MHz A block licenses, the additional spectrum Leap is acquiring will supplement the 10 MHz of spectrum Leap currently owns and operates in Chicago.
Leap's non-controlled, majority-owned venture, Savary Island Wireless, LLC (Savary Island), has also completed the sale of AWS spectrum in various markets to Verizon Wireless. In connection with this transaction, Leap also repaid the balance of a promissory note which was secured by a portion of the spectrum Savary Island sold to Verizon Wireless.
"These transactions generated net cash proceeds of more than $120 million that we plan to use to support our ongoing deployment of next-generation LTE network technology," said Doug Hutcheson, Leap's president and chief executive officer. "We expect to offer LTE services to at least two-thirds of our current network footprint over the next two to three years."
The sale of spectrum in these transactions will not impact Leap's operations in its existing operating markets.