Leap Wireless (LEAP) says its Cricket prepaid service lost 140,000 customers during the most recent quarter, while the company lost $83.4 million on revenue of $694 million. Average revenue per user was the one bright spot for Leap, increasing $3.51 year-over-year to $45.45. The company said that customers are moving to higher-end devices and to higher value service plans.
Leap is in the process of being acquired by AT&T for $1.2 billion. Leap shareholders approved the transaction Oct. 30, and it is now being evaluated by the Federal Communications Commission. Leap holds 1.9 GHz and 1.7/2.1 GHz spectrum licenses covering approximately 137 million potential customers.
Year-on-year, Leap’s third-quarter revenue was down 10.5% and its operating income before depreciation, interest and taxes was down 40.7%. Leap noted that its total customer base was down approximately one million customers from the end of the third quarter of 2012 to 4.6 million subscribers.
“Gross customer additions decreased year-over-year primarily due to increased competitive activity and customer demand for an affordable purchase path to higher-priced devices,” said Leap CEO Doug Hutcheson in a press release. Hutcheson also noted that churn was down by 60 basis points year-on-year and that “customer survival was recently at its highest rate in over a year.”
Cricket’s survival seems likely despite the ongoing customer losses, thanks to AT&T. The nation’s second largest carrier has said it will retain the Cricket brand alongside its own prepaid brands.
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