The wireless industry is becoming more and more consolidated and on Friday with AT&T’s acquisition of Leap Wireless, the industry was consolidated even more. AT&T announced that it had acquired the prepaid wireless business for a price of $15 per share.
AT&T is the country’s second largest wireless provider and will pay close to $1.2 billion for the company stock, its wireless properties, retail stores, network assets and licenses.
As of the sale date, Leap has approximately 5 million customers. Its service is sold under the Cricket brand.
Leap is based out of San Diego and its shares on Friday were up 2.5% to end the week at $7.98, prior to the release of the news regarding the acquisition by AT&T.
However, as soon as the news was released, Leap stock skyrocketed in trading after hours to $17.31.
With its new acquisition, AT&T now has the chance to access quickly and increase its presence in the market of pre-paid, which is becoming more and more lucrative.
AT&T will keep the Leap name and will open its lightning fast 4G LTE network to all customers at Cricket. The wireless giant is also interested in offering the Cricket service to more cities nationwide.
The Federal Communications Commission and the U.S. Justice Department must first approve the deal prior to its closing. However, once it is completed, AT&T will tap into Leap’s unused spectrum of more than 41 million people that will help it to increase its LTE network size.
Leap now has coverage that covers 35 states and at the end of this year’s first quarter had 4.6 million customers, which was down from 5.1 during the same quarter one year ago.
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