Leap Not Worried About Verizon's Unleashed Plan
Prepaid provider Leap Wireless (NAS: LEAP) doesn't think Verizon (NYS: VZ) Wireless' nationwide launch of its $50 prepaid unlimited "Unleashed" plan will affect it much, according to Leap CEO Doug Hutcheson.
Speaking at the Bank of America Merrill Lynch Media, Entertainment & Communications conference, Hutcheson said that the plan, which will be launched nationwide tomorrow, will likely affect customers in the postpaid market who might want to switch to prepaid rather than existing prepaid customers. He said that in the coming months Leap will release new devices, including smartphones, that will help carry the company through the holiday season.
Verizon's prepaid Unleashed offering provides unlimited talk, text and Web for $50 per month. Leap offers a range of prepaid plans, including unlimited options starting at $45 per month.
In a wide-ranging interview, Hutcheson talked about the company's LTE plans, smartphones and AT&T's (NYS: T) proposed $39 billion acquisition of T-Mobile USA. The Leap chief said the company will deploy FDD LTE, just as Verizon has done. Leap plans to deploy LTE across approximately two-thirds of its current network footprint over the next two to three years, with a commercial trial market scheduled for launch in late 2011.
"We have not selected all of the vendors for the different phases but clearly have vendors very active in markets now," he said, noting Alcatel-Lucent (NYS: ALU) , Ericsson (NAS: ERIC) and Huawei supply Leap with CDMA equipment right now. "We'll continue to look at decisions we make on that [LTE] and drive it ahead," he said.
Hutcheson also said that next year the company will give smartphone customers more options to handle data throttling, which Leap currently does on a market-by-market basis but generally after smartphone customers consume 1 GB of data. He said Leap customers will have the option to "buy back up the fastest speed data as they go through the month."
The Leap chief also said that even if AT&T's T-Mobile acquisition gets blocked, Leap will continue to sell smartphones and focus on improving average revenue per user and lowering churn. "If the merger was to go through, that's good for us in the near term," he said. "I think there will be more and more customers that will think about us. But I think they are going to think about us without the merger."
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