Leap Wireless International Inc., which has seen a run-up in stock in recent weeks, announced a new branding strategy for its Chilean operating company.
Leap in April bought out its former Chilesat PCS partner, long-distance carrier Telex-Chile. Leap has since renamed the company Smartcom PCS and reports the growth opportunities in the Chilean market are tremendous.
“If you look at the market, it reached 3-percent (penetration) in 1997 to almost 10 percent this year,” said Dan Pegg, senior vice president of public affairs with Leap. “Chile is one of the fastest-growing markets and has a good economy. It hasn’t had a lot of the government and regulatory difficulty we’ve seen in other areas.”
Smartcom is the first to launch prepaid service in Chile with per-second billing. In addition, Smartcom doesn’t charge long-distance fees for calls within the country.
Through its operating companies, the Qualcomm Inc. spinoff has launched Code Division Multiple Access service in the United States, Mexico and Chile. And it appears the carrier is focusing internationally on the Latin American market, though Leap said it is still interested in other international operations as well.
Leap recently pulled out of its operations in Russia and Australia, however.
The carrier is writing off about $27.3 million from its indirect ownership stakes in the financially troubled Russian operations.
Leap said it has ceased funding loans to Metrosvyaz, a company in which Leap holds a 35-percent interest, which is attempting to establish joint ventures in Russia to operate wireless telecom companies. Leap said it stopped funding the loans because Metrosvyaz had not satisfied certain conditions to funding and is now in default under its loan agreement.
In August, Leap agreed to sell its wholly owned subsidiary, OzPhone Pty. Ltd., to an affiliate of AAPT Ltd. for $16.3 million, saying the sale was more beneficial to shareholders than operating in Australia.
“We have not eliminated or given up interest in any other opportunities that may arise,” said Pegg. “We’re seeking market conditions that will provide our shareholders a return.”
Leap’s share price in recent weeks had taken a dramatic climb, closing at $91 per share Nov. 9. Analysts believe the stock was trading on former parent company Qualcomm’s highs. Its stock had been trading in the upper $300 range. Leap’s stock at RCR press time was trading in the $56 range.
