AT&T's $1.2B bid for Leap is mostly about spectrum

AT&T’s plan to take over prepaid wireless operator Leap Wireless is primarily about gaining much-needed spectrum for mobile broadband services.

Leap operates a legacy CDMA network and has deployed LTE to a coverage area of 21 million POPs. But average speeds on its LTE network are only around 4 Mbps due to the operator's spectrum constraints. AT&T will likely shutter Leap's existing CDMA and LTE networks, refarming the spectrum for use with its own HSPA and LTE services much as T-Mobile is doing with the CDMA and LTE networks it gained when it acquired MetroPCS. Clearly the main attraction in this deal is Leap's spectrum holdings, which include 1.9 GHz PCS licenses and 1.7/2.1 GHz AWS licenses covering 137 million POPs. The spectrum is said to be largely complementary to AT&T's existing spectrum licenses. AT&T said it intends to put Leap's unutilized spectrum--which covers 41 million people--to use in furthering its own LTE deployment "and providing additional capacity and enhanced network performance for customers' growing mobile Internet usage."