Wheelings & Dealings: AT&T Finally Gets Hook of Leap's Spectrum - Acquisition Completed

Spectrum (News - Alert) is the key focus and considered to be a great asset today with many players in the telecom industry. Be it big players or small entrants, all are eyeing on grabbing spectrum, the ultimate power. Back in July 2013, the same happened with AT&T (News - Alert). Back then, the company entered into an agreement to acquire prepaid wireless provider Leap Wireless International.

The acquisition includes spectrum in the PCS and AWS bands covering 137 million people and is highly complementary to AT&T's existing spectrum licenses. Leap runs the Cricket prepaid wireless service, which has about 5 million subscribers.

The merger plan eventually raised concerns that the acquisition of the popular wireless service could harm public interest.

With much speculation, AT&T finally closed the Leap Wireless International Inc. acquisition for $1.2 billion. The company acquired Leap's Wireless properties like licenses, network assets, retail stores, and subscribers along with its stocks. The Federal Communications Commission successfully approved AT&T's acquisition of Leap Wireless (News - Alert).

Apart from the control over Leap's spectrum, AT&T will also benefit from more customer care service facilities, low-cost data plans, and robust financial resources. Further, the deal will endow AT&T with a stronger pre-paid business line with the incorporation of the Cricket brand.

According to a press release, AT&T will integrate Cricket with its existing operations to form a no-contract segment offering low-cost rate plans, smartphones, and a strong network experience from AT&T. The new Cricket will leverage from AT&T's nationwide 4G LTE (News - Alert) network covering nearly 280 million people, while AT&T will benefit from Cricket's distribution channels and additional markets. AT&T expects customer migration to Cricket to take approximately 18 months after the launch of the new brand.

As believed, the deal will strengthen AT&T's network capacity in striking markets and improve its presence in the growing prepaid market. Moreover, this takeover is seen as a value addition for AT&T, fortifying its position in the wireless industry against top players like Verizon Communications, Sprint Corporation, and T-Mobile (News - Alert) US.

Back in 2011, AT&T aimed at buying T-Mobile USA for $39 billion, but the deal failed to materialize due to disapproval by the U.S. regulators.

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