FCC approves AT&T’s $1.3 billion acquisition of Leap Wireless

By , Mar 14, 2014

AT&T Chicago store (interior 001)

Last summer, AT&T announced that it had reached an acquisition deal with Leap Wireless. The company said that it would be buying out the provider, which owns and operates the popular prepaid carrier Cricket, for $15 per share—equal to $1.3 billion. All it needed was approval from the FCC.

And it just got it. Yesterday the Federal Communications Commission gave AT&T’s acquisition proposal a thumbs up, ruling that “the public interest benefits of the proposed transaction outweigh the likelihood of significant public interest harms.” So what does this mean for everybody involved?

It’s pretty simple. As for AT&T, it picks up 5 million or so new customers, some much-needed clout in the prepaid world, and all of Leap’s network assets. Leap Wireless gets $15 per share, and whatever else came with the package. And Leap customers get access to more devices and a larger network.

There was some negotiations involved. Here’s a list of some of the commitments AT&T made to the FCC to seal the deal (via The Verge):

  • Spectrum divestitures in certain markets, which will help ensure that AT&T’s competitors have access to spectrum.
  • Deploy LTE service using unused Leap spectrum within 90 days or 12 months of closing, which will ensure that that spectrum is being deployed and that consumers in the current Leap service areas will benefit from network improvements to AT&T’s advanced 4G network technologies.
  • Build out LTE service in six specific markets in south Texas within 18 months, which will ensure that consumers in those markets have access to advanced 4G services.
  • Offer certain rate plans targeted to help value-conscious and Lifeline customers.
  • Offer a device trade-in credit program and a feature phone device trade-in program to certain Leap customers prior to discontinuing CDMA service in a particular area in order to ensure that Leap customers have future access to wireless service.
  • Honor existing CDMA roaming agreements that AT&T is assuming from Leap so long as it operates the CDMA network.

The way I understand it, AT&T will slowly be migrating Cricket users off of CDMA onto their GSM network. This will obviously take a few years, but this offers many benefits to Leap customers such as a larger (and faster) LTE network, a larger retail footprint, and a much wider selection of devices.

Leap Wireless logo (medium)

Cricket currently offers both the iPhone 5s and 5c, but in CDMA form, and this deal will give customers the ability to purchase GSM versions which are much more compatible with domestic and international carriers. Again, I see this as a win for everyone as long as everything goes according to plan.

What do you think?

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  • http://www.kypackrat.com/ Kentucky Packrat

    I went with Cricket originally because it has the cheapest good service in my area. Now, Family Mobile has it. I just want to be able to unlock my hostage iPhone and switch….

  • Lurker22

    WOnder what this means for AIO Wireless (ATT Prepaid service), and the coverage quality of AIO? I know it was reported that ATT would “merge” AIO into cricket/leap if approved. Just curious what that means…

    • Rowan09

      I don’t have any issue with AIO wireless service it runs on AT&T network so AT&T’s service will improve and also make AIO wireless better. AT&T limits the LTE speeds on AIO wireless to try and keep customers on AT&T.

      • Lurker22

        Yea, i know they limit the speed. But after a month of use I can’t tell the difference from ATT I had before with “unlimited” speed and AIO in day to day use. This is including the very high ping times of AIO

      • Rowan09

        I agree. I switched from MetroPCS to AIO since AT&T has a better network than T-mobile. Metro has higher speeds but not the best service.

      • Lurker22

        Because MetroPCS is Sprint. Sprint network is horribly slow

      • Rowan09

        No it’s t-mobile since last year I believe, they bought them. The network is fast just doesn’t have better coverage than AT&T since it’s t-mobile.

      • Lurker22

        Ah so it went from one poor provider to another :)

      • Rowan09

        Lol. I had t-mobile as well and they improved a lot.

    • iFLoWx7

      Aio Wireless is official
      My Best prepaid carrier so far.:
      Unlimited Talk and Messaging
      Voicemail, call waiting/forwarding,
      text/picture/video messages AND 5Gbs of 4G LTE and the service and great.

  • Carlos Sloan

    Does anybody know how much the iphone6 plus will cost on cricket and the date they are getting it