UPDATE:Leap Operating Chief: Sees Break-Even Point By End Of 2009
August 06 2009 - 7:10PM
Dow Jones News
Leap Wireless International Inc. (LEAP) expects to hit the
break-even point by the end of the year, according to Chief
Operating Officer Al Moschner.
The discount carrier expects average revenue per user to fall as
a result of a higher mix of broadband products and its
pay-as-you-go offering, Moschner told analysts in a conference
call.
Average revenue per user is expected to be in the high-$30
range, he said. ARPU in the second quarter was $40.73.
While results were hurt by competition, Moschner said the higher
attention gained from so many rivals would help the broader
transition of customers from contracts to pre-paid services.
"We have a history of competing against lookalike competitors,"
he said.
Chief Executive Doug Hutcheson said in an interview with Dow
Jones that the company is taking steps to improve its market share.
Leap recently added more features to its service plans in an effort
to stay competitive.
Furthermore, Hutcheson said the company has faced off with many
competitors, and Leap was built in an environment of tough
competition. The company has thrived despite the hurdles, he
noted.
The company slightly lowered its projection for full-year
subscriber growth to 1.5 million. It previously expected to exceed
1.5 million. Hutcheson said he expects a bulk of the subscriber
growth to occur in the fourth quarter.
Leap had taken a hit in a recent consumer survey even as its
rivals made gains. Hutcheson said he was actually seeing the
customer satisfaction and recognition levels rising.
Hutcheson also said he would support a merger with MetroPCS
Communications Inc. (PCS) on the right terms. The companies have
been long talked about as potential partners, because their
territories match well together and they have similar business
models.
-By Roger Cheng, Dow Jones Newswires; 212-416-2153;
roger.cheng@dowjones.com