Leap posts narrower 4Q loss, shifts focus from growth to cash flow

Coming off three months of tremendous subscriber growth, Leap Wireless posted a narrower fourth-quarter loss of $79.6 million on revenues of $103.9 million. Leap, which runs wireless carrier Cricket, said it expected cash-flow losses in 2002 to be much smaller as it focuses on its current 40 markets instead of expansion.

Last year’s fourth-quarter loss was $103.5 million on revenues of $14.3 million. For the year, Leap posted a total loss of $483.3 million, but Leap officials said that those numbers would drop in 2002 as Leap focuses on penetrating existing markets.

“While 2001 was a year in which we focused primarily on growth, 2002 will be year we focus on cash flow,” said Harvey White, Leap chairman and CEO. “With that we expect to turn EBITDA positive for the fourth quarter of 2002.”

For year 2001, White said Leap expects to have a cash flow loss of $75 million, more than half of the $180 million projected by Wall Street. Leap built out its 40th market in Buffalo, NY, last week, one month behind its 40-markets-in-2001 plan. But Leap met its goal of $1.1 million customers in 2001 handily, adding 394,000 customers in the fourth quarter for a total of 1.12 million.

Leap’s strategy has been to build out small to mid-size market and have them become cash-flow positive in 12-15 months hit a snag last year, when the anticipated transfer of 22 Next Wave licenses was stalled in court and in Congress. Without building any new markets Leap will save and estimated $1.5 billion in planned capital expenditures in 2002.

-- Kevin Fitchard, staff writer