Will T-Mobile Consider Making A Run At Leap Wireless?

leapwireless

There hasn’t been a shortage of T-Mobile takeover, merger, acquisition rumors in as long as I can remember, but at least this time around T-Mobile is yet again considered a potential buyer. According to Macquarie Capital analyst Kevin Smithen the timing may be right for a T-Mobile takeover of Leap Wireless.

“T-Mobile’s share price has appreciated from around $15-per-share to $24-per-share, making a stock deal for Leap more palatable in our view,” he wrote in a report.

“Leap stock is tightly-controlled by a few holders and this can be both a catalyst and an obstacle for a sale,” Smithen said. “We believe that a buyer would have to pay at least $10-per-share to acquire Leap, and perhaps higher. In the meantime, T-Mobile will be entering a lot of Leap markets in the second half (of 2013). This could put further pressure on Leap’s already eroding operating business.”

While it’s possible that Dish Network may also take a look in Leap’s direction, there’s still the potential that Dish may yet again turn its focus on T-Mobile USA itself. Leap was once considered a suitor for T-Mobile assets in the wake of a potential AT&T deal that saw the latter company having to give up assets to push the deal through. Leap ended the first quarter of 2013 with 5,203,747 customers, a 16% decrease from the same period in 2012.

T-Mobile’s currently trading at $23.33 as of this writing.

Investors.com

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  • samsavoy

    They should fix their network and grow organically for now. Acquisitions will just delay them further. MetroPCS was a good buy, but it will be interesting to see how many of those customers wind up migrating to T-Mobile instead of leaving for another carrier “because they had to get a new phone”

    • TechHog

      That’s the thing. They need spectrum to grow. It can’t happen organically.

      • James Shaggy

        Exactly. Plus I believe Leap has a few PCS licenses that TMUS can use to further delpoy HSPA+.

        • Noah James

          I’m not sure that deploying more HSPA+ to new markets is very high on T-mobile’s list. The deployment of LTE seems to be the main focus for them, at the moment.

        • ggfb20

          I think hspa+ should be high on their list, if they only served lte and hspa+ on their network they would overtake big red in the wireless war. Plus make all of their customers elated.

        • Noah James

          HSPA+ should be higher on their list then it is. overtaking Verizon would require huge coverage improvements along with EDGE & GPRS areas to at least be upgraded to HSPA+ .They would need massive subscriber growth. After that they could have a chance of overtaking V.

        • kalel33

          ggfb20, now that’s the funniest thing I’ve read all day. Verizon’s current LTE is larger than T-mobile’s entire network and that’s not even counting their 3g and 1xevdo. T-mobile’s network will never come close to Verizon’s, unless they start building out thousands upon thousands of more towers. T-mobile will stay a metro type carrier.

        • Roger Sales

          If I recall correctly, Leap’s PCS holdings are deeper than Metro’s was.

      • samsavoy

        Looks like Leap has some 700MHz, but not spread out enough to make it worth it for T-Mobile

        • James Shaggy

          Tmobile could always sell that off to VZW or at&t for PCS licenses.

        • samsavoy

          I just dug up a story where they acquired that 700MHz from VZW. It would be interesting, but they need low-band spectrum.

        • James Shaggy

          TMobile does need low band spectrum but Leap doesnt have enough of it to wanna keep what they have. TMobile is better off trading to VZW or at&t for PCS so they can put that to use rite away and then buying heavy in the 600mhz auction.

        • gadget_hero

          600 MHz by the day is looking like its going to be DOA, if the TV operators don’t sell there wont be much of a auction.

        • TMOTECH

          T-Mobile is in the middle of spending billions of dollars putting PCS band and AWS band radios at the top of the tower. They are not going to switch to lower band spectrum any time in the foreseeable future. Sorry to just your bubble but it just isn’t going to happen. .

        • BigMixxx

          leap has a lot of AWS — that’s what it’s about.

          They will sell the 700 MHZ stuff to the highest bidder or the company that can align with T mobile to offer the best data roaming rates and right now Verizon and T mobile are really good friends….

        • James Shaggy

          I dont see VZW and TMobile doing a LTE roaming agreement, maybe Sprint.

        • BigMixxx

          Not necessarily a roaming agreement, but T mobile MIGHT own more AWS bandwidth than Verizon, There maybe another spectrum swap to get more uniform AWS space between the two companies…(I don’t know who own what space, but google has it indexed somewhere)

        • sino8r

          Where have you been dude? I have seen you around in a long time…

    • Jeff Howard

      T-Mobile has said 60% of metro customers get new phones every year. I don’t think that will be a problem. And since T-Mobile as well as metro are prepaid, it’s not like they’re inclined to switch to Verizon, at&t, or Sprint so they can pay twice as much.

  • http://www.kdmstance.com BiGMERF

    More spectrum the better.. Get some of the 2g and dead zones covered !

  • Guest

    if it help with 2g and deadzones, im all for it

    • Noah James

      Well I know of at least one area around were I live that T-mobile has 2g {edge} and in the same place cricket has evdo 3g.

  • Chris

    Got into t-mobile stock around 16-17 and just sold it Monday for almost 24. I don’t see it changing much in either direction for a while.

    • Khanh

      should’ve wait til at least after the announcement.. it went up a bit today too

      • Chris

        “should’ve waited” that’s what we call hindsight and it’s not available in the present. Either way, the stock is still floating around the same mark, it didn’t go up to its recent high.

  • Paddy_Tanninger_Caddy_Manager

    Leap is tiny…

  • Jesito473

    Hmm interesting, that would help ease somewhat the Spectrum restraints we have here in Cincinnati, or at least I’d like to think so.

    • http://pharaohtechblog.blogspot.com/ Conan Kudo (ニール・ゴンパ)

      It would. Leap’s spectrum is contiguous with T-Mobile’s, and remains unused.

      • Jesito473

        Well lets hope they do decide to jump on it, cause we desperately need it here

  • Jay J. Blanco

    With those 5 Million extra customers T-Mobile would be on Sprint heels lol

    Don’t leap control Cricket Wireless?

    • Jesito473

      Yep

    • Noah James

      yes, leap does control cricket wireless.

      • Jay J. Blanco

        So the question is if this is true. What will happen to Cricket. Lol
        Maybe tmobile will keep the brand just switch it to tmo network. Who knows. Just gotta wait and see what happens with Dish and all these rumors.

        • Noah James

          I guess they would keep the name around and convert cricket customers to the t-mobile network { like MetroPCS.}

        • Trevnerdio

          T-Noble…I like it lol

        • Noah James

          Lol didn’t catch that.

        • ggfb20

          Tmobile should offer free or discounted devices to customers who were acquired via mergers and buyouts, and then put them on the new plans without a contract or pay as you go. Upgrade all the the newly acquired towers with lte and be sure to use hspa and hspa+ as a backup across the country. Do away with 2g/edge alltogether.

        • Noah James

          They cant afford to give away 5,203,747 phones at no cost. I do agree they should do some discounts for customers gained in buyouts/mergers. With the MetroPCS deal the customers could keep metro’s plans. Cricket does have LTE in a few markets, for those they don’t HSPA+ is a good fallback {and T-mobile’s LTE} OH PLEASE SOMEONE GET EDGE/GPRS OUT.

        • Jay J. Blanco

          I 100% agree.

        • Jeff

          Getting rid of EDGE isn’t gonna happen any time soon. There are far too many M2M (machine 2 machine) customers out there that don’t need high speed data owing to the fact that they are sending only small packets of information from time to time.

        • Noah James

          I know that isn’t going to happen soon but it needs to happen at some point.

    • ClausWillSeeYouNow

      Actually, the proper terminology is “T-Mobile would be on Sprint’s Achilles tendon,” as the heel is very close in proximity to the Achilles tendon. And T-Mobile would be closer than that anyhow – Sprint’s network is so laughable it passes as a joke, all by itself nowadays.

      Person 1: “Knock-knock.”
      Person 2: “Who’s there?”
      Person 1: “Sprint’s network.”
      Person 2: “That’s not funny. It’s sad, you sick b*****d.”

  • BigMixxx

    This is interesting:

    T mobile buys a bunch of Spectrum from US cellular and a more than likely will by Leap wireless for cheap for that very same reason.

    I posted a long time ago (tooting my own horn here) ‘there is something special about the AWS spectrum’ and it must be that it marry’s up with a lot of other spectrum’s fairly easy. Verizon is using it to backfill some of their lte gaps, ATT is using it for LTE and these two companies are the major holders of that 700 mhz spectrum.

    T mobile will get close to being the largest holder of AWS space. I see data roaming agreements coming with ALL wireless companies. Talk about rain dance….

    Good move to buy the company…let them convert leap. Sprint should REALLY be shaking in their boots as the LTE bid for 3rd place is quickly heating up….

    • RobotChupacabra

      Sprint has lots and lots of EBS spectrum after the Clearwire purchase. They’ll be OK.

  • Whitney

    Sweet. I just convinced my cousin to switch to Tmobile yesterday.

  • Noah James

    I don’t know if a merger between leap and T-mobile will happen but if it does that will will do nothing but help in my area. I’m all for it.

  • Noah James

    ’16% decrease from the same period in 2012.” Now that hurts.

  • Jeff

    As long as companies keep corrupt directors and let these directors decide elimnate jobs of hard working employees, they cannot succeed. Organization can only succeed if they have honest leaders not corrupt leaders (John).

    • TechHog

      That was random.

    • ClausWillSeeYouNow

      Clearly, you’re a racist.

      Just kidding.

      But you are crazy. Probably from a union.

      Don’t you need to be pooping on a police car or something? Go back to your “Occupy Bellevue” rally.

  • Alex Zapata

    Hmmmm, LEAP does have a good bit of delicious spectrum. Go forth T-Mobile, you have my blessings!

    • Richard

      You might say hmmmm now, but “mmmm yuck” is what you’ll be saying when you realize that LEAP has limited prospects, a horrible franchise network (compared to Metro, for example), and tastes like crap. Yuck indeed.

      • Zero0

        Their spectrum is good, but not $5 billion good. Maybe for some other carriers, but not for T-Mobile, who is loaded with AWS and PCS spectrum now. More spectrum is good, but that money could go towards the low frequency spectrum T-Mobile desperately needs, and might even help upgrade modernize of the EDGE coverage.

  • fsured

    One of the companies will make a play for Leap. Only a matter of time and if they are losing customers…investors should push to make that happen sooner before profits shrink more. I’d rather Tmobile go with the transaction than Dish.

    Doesn’t Dish have deeper pockets to create a bidding war and end up pushing the cost up more? Similar with that happend with Sprint and Clearwire.

  • http://www.makeuseof.com Danny Stieben

    I’d approve if T-Mobile bought Leap and US Cellular. Then work on organic growth.

    • TechHog

      No such thing as “organic growth.” It’s all based on spectrum.

      • Richard

        Yeah. And, plus, they all use pesticides now anyhow.

  • Noah James

    I wonder how much spectrum T-mobile is using for edge across the US?

  • taron19119

    This will happen cause dt world cut down how much stock it owns of tmobile and still own maturity

  • Richard

    I just switched to Dish Network and I say bring it on. An amazing company that has what it takes to succeed – that’s what a combined Dish and T-Mobile would be.

    • Jason Crumbley

      Which of those companies do you work for?

      • sahib102 .

        He doesn’t have to work for a company to say he like it I have used dish network for 5 years now and for the most part I have enjoyed their service and again it’s my opinion and it could vary depending on people and if he thinks its a good Idea for that to happen let him say that he’s not forcing his opinion onto you …anyways that was my thought on what you said and its my opinion:)

        • Richard

          Thanks. Lol I really don’t understand why people don’t like Dish.
          It took a lot for me to cancel my DIRECTV, but I am sure glad I did.

      • Richard

        What’s your problem with Dish, exactly? They have the most advanced whole-home DVR (bar none), the most affordable TV packages in the industry, and the spectrum T-Mo needs. What’s the disconnect here?

  • sahib102 .

    To be honest this is the first time learning about leap :/ but if t-mobile does buy it then it means more spectrum for t-mobile !! :)

    • BlackLighted

      Leap is a “silent parent” company.
      You might have heard of them by their better known consumer business name, CRICKET

      • sahib102 .

        ahhh that I do know that company and thanks for the little info :) appreciate it

  • xmiro

    Leap stock’s high was July 20, 2007 at $95.90
    At $10/share T-Mobile could snag Leap for about $790.5 mil

  • Jeff

    Companies which keep corrupt directors (John) and eliminate hard working employees or replace hard working employees with their own buddies based on John’s decision will always be failure and last on in their industry. They will always need some other company or bank to keep them running and to distract their customers and employees. But sooner or later these type of companies get crushed under the weight of their own corruption.

    Director like John who hasn’t done a single positive thing for the organization, employees or customers. He is still sitting ideal replacing hard working employees with his buddies, collecting large salary and bonus for all his corruption and discriminating activities.

    It is amazing these organizations are still existing with all these corruptions.

  • superg05

    They need to buy low band spectrum with better building penetration metro did have 10-12 mhz of 700 in some markets though

  • S. Ali

    Better off saving money if FCC auction the 600mhz spectrum

    • BlackLighted

      Nothing is guaranteed with 600MHz, the current FCC commissioners would sooner gift that band to AT&T and Verizon before it let’s T-Mobile imagine bidding for it.

      Problem #2 is that 600MHz won’t come into play for another 3-5 years from now, as it is still home to hundreds of TV broadcasters, who must be convinced to move or go dark to free up the band for auction.

      I am looking at the Philadelphia market right now, and T-Mobile only has 40MHz total of AWS spectrum, 10MHz occupied by MetroPCS, 20Mhz occupied by 2x 5+5 channels of T-Mo HSPA+, and 10 MHz by T-Mo 5+5 LTE

      In some major markets, the only source of additional AWS spectrum is either through buying Leap/Cricket, or buying Verizon, the latter of which being impossible.

      They should take what they can get while they can still get it.

      • ClausWillSeeYouNow

        T-Mobile should buy Verizon. That would be really cheap, since they have such a small native network.

      • keasycase

        With metro T-Mobile has 60mhz… The r reusing some aws from hspa+… So the can have 20*20 lte in the top 25 markets I think they said… Or at least 10 by 10

        • BlackLighted

          Not in Philly they don’t, it’s a “Top” market, and adding MetroPCS brings them up to only 40MHZ total.
          For 20+20 LTE, the will need to shut down MetroPCS completely, and shut down their own AWS HSPA+ completely.
          As they offload traffic onto HSPA+ 1900 they can free up one of their AWS HSPA+ channels, but only their latest phones (sold in the past 6-8mos. or so) support HSPA+ 1900, so T-Mo would have to force customers to upgrade their slightly older phones to ones that support 1900 HSPA+.
          MetroPCS won’t be shut down for another year or two.
          LTE is 5+5 now, may become 10+10 or 15+15 in a few years, but won’t get to 20+20 without purchasing more AWS spectrum.
          Leap/Cricket is sitting on 20MHz of AWS that is essentially unused, which would make an excellent acquisition if they would hopefully decide to go in that direction.

        • keasycase

          T-Mobile said they will have 20*20 in the top 25 markets… Philly is number 5 tryst they will have it

        • BlackLighted

          They don’t have the spectrum in Philly to do 20+20 LTE, unless they completely shut down AWS HSPA+ as well.

          And Philadelphia is listed as FCC CMA004 so it’s considered the #4 Market by fcc.gov statistics.

          T-Mobile owns:40MHz

          AWS A-Block: 20MHz
          AWS B-Block: 10 MHz (B-Block is 20MHz but Verizon and T-Mobile split it as part of the SpecrumCo transfer last fall)
          AWS D-Block: 10 MHz (MetroPCS)

          Leap/Cricket owns: 20MHz

          AWS C-Block 10MHz

          AWS E-Block 10 MHz

          Verizon owns:

          B-Block: 10MHz (other half is owned by T-Mobile)

          F-Block: 20MHz

          There is 90MHz total AWS spectrum allocated to this market.

  • T-Mo1082

    I rather Google buy out T-Mobile than any type of merger with Dish or Leap.

    • superg05

      here here

    • Beyonce Knowles

      I wouldn’t.

  • justme002

    Looks like AT&T is buying out Leap Wireless! :-(

  • macman37

    Have T-Mobile USA’s parent Deutsche Telekom counterbid AT&T with a higher offering! Teach the evil empire a lesson about being too greed! I do hope that the Dish Network and T-Mobile USA can work something out, because that is something too good to pass up on and let someone else have. We don’t want any of T-Mobile’s executives saying what Verizon Wireless’ Lowell McAdam said to the late Steve Jobs, “We ought to talk about how we do business with one another to make sure that nothing is overlooked.” Something along those lines, but something we don’t to read about and hear later on. T-Mobile USA needs some cash flow to be competitive with other 3. They already made great strides, but let’s not let it stop now with an ego issue.