Qualcomm Inc. said it expects to distribute common shares of Leap Wireless International Inc.-Qualcomm’s spun-off wireless communications carrier-Sept. 23 after the close of marketing trading.
The Securities and Exchange Commission indicated it has no further comments to the registration statement filed by Leap Wireless. Regular public trading of Leap Wireless shares under the ticker symbol “LWIN” is expected to begin on the day following the distribution date, or on about Thursday, Sept. 24, said Qualcomm.
Qualcomm indicated in late May it was considering spinning off most of its assets in wireless operating companies in part to boost the company’s earnings in future quarters.
Leap Wireless plans to deploy Code Division Multiple Access (cdmaOne) fixed and mobile networks in domestic and international markets. Qualcomm is transferring to Leap all of its joint venture and equity interests in Pegaso Communicaciones-which won personal communications services licenses in Mexico-Metrosvyaz of Russia, Telesystems of Ukraine, OzPhone Pty. Ltd. of Australia and certain other development-stage businesses that include opportunities in the United States and Chile.
Leap International’s Form 10 indicates the company holds a small investment in Chase Telecommunications Inc., a U.S. C-block PCS licensee that plans to offer cdmaOne service during the fourth quarter of 1998 in Chattanooga, Tenn., followed by launches in Nashville, Knoxville and Memphis. Current intentions are for Chase to arrange roaming agreements and use brand recognition under the PrimeCo Personal Communications L.P. brand name. Qualcomm is an equipment supplier.
Qualcomm’s strategy has been to enter into strategic alliances with domestic and international emerging wireless telecom operating companies in order to expand cdmaOne technology worldwide. However, these alliances often have required Qualcomm to invest substantial equity in the operating company as well as a commitment from the operating company to purchase cdmaOne equipment from Qualcomm.
Without a spinoff of the assets, Qualcomm would have continued to recognize start-up operating losses associated with some of the operating companies and would be limited in its ability to recognize revenues from equipment sales to these companies.
