Leap adds customers, increases net loss for year

Leap Wireless International Inc. (LEAP) added 430,000 customers in the fourth quarter, the majority of whom came from Leap’s acquisition of Pocket Communications in October. The flat-rate carrier ended the year with about 5.52 million customers, up 18% from the 4.4 million it counted at the end of 2009. Net customer additions for the quarter comprised 155,000 voice customers, offset by a loss of 48,000 broadband customers.
However, Leap recorded a net loss of $167 million for the quarter on revenues of $708 million, while it posted a net loss of $785 billion for the year, on revenues of $2.7 billion. The company lost 160% more money in 2010 than 2009. Average revenue per user declined to $37.76 for the year, from $40.26 in 2009.
“During the second-half of 2010, we implemented a significant number of initiatives to transition our business to better meet the changing needs of our customers,” said Doug Hutcheson, Leap’s president and CEO. “These initiatives, which included the evolution of our rate plans, the expansion of our device portfolio and the introduction of nationwide 3G data coverage, have produced operating results that have exceeded our expectations in many areas. ARPU improved in our core voice business to near prior-year levels, driven by the adoption of our all-inclusive rate plans and the sale of more than 600,000 3G data devices during the quarter. Voice churn for the fourth quarter was 3.6 percent, the lowest fourth quarter churn rate in nearly a decade. Device upgrade activity increased more than 300% year-over-year, and two-thirds of our customer base is now on an all-inclusive rate plan. Current results indicate that customers who upgrade to a new device and migrate to our new service plans are approximately 60% less likely to deactivate service in the ensuing five months than those who do not. We believe that the transition that we have driven in our customer base will result in increased customer lifetime value and will deliver further churn and ARPU benefits and improved financial performance.”