Leap, MetroPCS make nice
Carriers exchange spectrum, sign roaming agreement, drop litigation
A merger may not have been in the stars, but Leap Wireless and MetroPCS accomplished the next best thing. The two have signed a mutual roaming agreement and swapped spectrum in overlapping markets, effectively dividing up the nation between their separate territories and, in the process, ending the two-year legal dispute between them.
The operators didnít release financial specifics of the deal, but the agreed to allow each otherís customers to roam on their networks at ďattractive and competitiveĒ prices. Considering both operators are of similar size, have aggressive growth plans and each focuses on different areas of the country, they both stand to gain equally from a mutual low-cost roaming and presumably negotiated better deals with one another than they could with a nationwide operator. Leap and Metro said they expect that the 10-year roaming deal to grow to encompass the top 200 markets in the country, with Leap focused primarily in the countryís interior and West Coast and Metro on major cities on both seaboards as well as the southeast.
The companies arenít eliminating overlap entirely. The two are going head-to-head in one of the biggest markets in the country, Las Vegas. But in several other regions, Leap or Metro is bulking up on the otherís licenses. Leap will get 10 MHz in San Diego, where it already has a PCS network, as well as 10 MHz in nearby Fresno, 10 MHz in Seattle and other communities in Washington state and Oregon. Metro will bolster its Dallas-Fort Worth and Shreveport, La., networks with 10 MHz of Leap spectrum as well as additional frequencies in North Texas and Florida.
Leap and Metro began their spat last year, when Leap filed a lawsuit against Metro claiming the operator was infringing on the patented all-you-can-eat local calling plan model Leap had devised for its Cricket Communications service provider. Metro responded by proposing what seemed to be a perfect-fit merger between the two, but Leap rejected the deal, accusing Metro of low-balling the offer by undervaluing its business. For the next few months a war of words played out between the two companiesí CEOs, exacerbated by both companiesí efforts to be the first in the lucrative Las Vegas market.
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