AT&T Taking a Leap

Peter : On Rad's Radar?
| Peter Radizeski of RAD-INFO, Inc. talking telecom, Cloud, VoIP, CLEC, and The Channel.

AT&T Taking a Leap

Bloomberg reported over the weekend that AT&T was going to buy Leap Wireless - for the spectrum of course - for about $1.2B.

"San Diego-based Leap also has $2.8 billion in net debt." Which will be added to AT&T's already massive debt load of $74 Billion in debt

VZW and AT&T are in spectrum hording mode. Most of the postpaid crowd (contracts) buy smartphones and use tablets on family plans. Yet the average revenue on the smartphones haven't increased much in the past few years.

The cellcos not only have to acquire spectrum, they then need to actually deploy it and backhaul it. Then figure out how to make more margin from it. Streaming video and the constant pinging of smartphones on the network is a huge network management proposition for the carriers.

The two RBOCs spend between $7 and $9 billion on their cellular networks. Plus acquisitions. Plus tons of marketing.

From the numbers below, it looks like the next frontier will be prepaid customers, although the prepaid cellcos like Leap and MetroPCS never hit a home run. So no idea how that will work as a side business for AT&T Mobility.

Another acquisition means another bunch of layoffs and the further shrinking of the middle class - but as long as the giants can keep eating all is good with the world.*

1Q2013 "Consolidated revenues of $31.4 billion, down 1.5 percent versus reported results for the year-earlier "

Strong cash from operations of $8.2 billion and free cash flow of $3.9 billion

total wireless revenues and wireless service revenues both up 3.4 percent versus the year-ago quarter [at&t pr]

296,000 wireless postpaid net adds; postpaid churn improves to 1.04 percent

1.2 million new smartphone subscribers; smartphones 88 percent of postpaid phone sales

Postpaid wireless ARPU is up only 1% from last year.

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