Leap And T-Mobile Announce Spectrum Exchange

Leap Wireless International announced on April 9, 2012 that it has entered into definitive license exchange agreements with T-Mobile USA, Cook Inlet/VS GSM VII PCS (a joint venture between T-Mobile and Cook Inlet) and Leap’s non-controlled, majority-owned venture Savary Island Wireless to exchange wireless spectrum in various markets.

Financial details of the transaction were not disclosed. These transactions involve only the assignment of spectrum – no other assets are included, and are primarily aimed at realigning the spectrum holdings of the involved parties. “These transactions will enhance our spectrum depth in these markets and provide us longer term flexibility to offer a larger LTE channel,” said Leap’s president and CEO Doug Hutcheson. “In addition the transactions will allow us to re-align spectrum in key markets into contiguous channels thereby optimizing our delivery of wireless services.” Through its wholly-owned subsidiary, Cricket License Company, Leap has agreed to assign eight of Cricket’s AWS licenses to T-Mobile covering portions of Alabama, Illinois, Missouri, New Jersey and Pennsylvania, among others. Cricket acquired the majority of these licenses at Auction 66 for approximately $230 million, or $0.42/MHz POP on average. In exchange, T-Mobile will assign nine AWS licenses to Cricket. These licenses were purchased by T-Mobile at Auction 66 for approximately $572 million in aggregate, or $0.33/MHz POP on average. These licenses cover portions of Arizona, Texas, New Mexico, New Jersey and Pennsylvania, among other areas.