Leap Wireless – the parent company of national, low-cost wireless provider Cricket Communications – is losing more customers, but selling valuable spectrum is making the company profitable.
In the fierce battle for wireless subscribers, the carrier says churn rose from 3.8 percent in Q3 2011 to 4.8 percent in the quarter ending Sept. 30, 2012. The prepaid carrier said in its earnings statement, released Thursday, that it lost almost 270,000 customers last quarter, compared to a gain of nearly 10,000 in the same period last year. Most of those losses were wireless voice subscribers, but the company also took a hit in broadband. Its total subscriber base is now a little more than 5.6 million.
The financials, on the other hand, look much better. Total revenue was up 1.4 percent from the year-ago quarter, to $774 million. Much brighter was profit, which is soaring. The company lost nearly $69 million in Q3 2011 but made $25 million this past quarter. The most significant reason for the gain was a deal to sell $120 million worth of spectrum to Verizon Wireless.
There's growing speculation that Leap is a growing acquisition target – and Sprint might be the one to get it done.