Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - LEAP WIRELESS INTERNATIONAL INC | d361372d8k.htm |
 iPhone
Announcement May 31, 2012
Exhibit 99.1 |
 Forward Looking
Statements 2
This presentation contains “forward-looking statements” within the meaning of the
Private Securities Litigation Reform Act of 1995. Such statements reflect
management’s current expectations based on currently available operating, financial and
competitive information, but are subject to risks, uncertainties and assumptions that could
cause actual results to differ materially from those anticipated in or implied by the
forward-looking statements. Our forward-looking statements include discussions
about our plans to sell the iPhone device, including projected customer acceptance of the device, churn
performance, customer usage and network impacts; expected impacts to the Company’s
financial and operating performance; and other forecasts and projections, and are
generally identified with words such as “believe,” “expect,”
“intend,” “plan,” “will,” “could,” “may” and
similar expressions. Risks, uncertainties and assumptions that could affect our
forward-looking statements include, among other things, our ability to attract and retain
customers in an extremely competitive marketplace; our ability to satisfy the minimum
purchase commitment for the iPhone; future customer usage of our wireless services,
which could exceed our expectations; our ability to manage or increase network capacity to meet
increasing consumer demands; and other factors detailed in the section entitled “Risk
Factors” included in our periodic reports filed with the SEC, including our
Quarterly Report on Form 10-Q for the quarter ended March 31, 2012, filed with the
SEC on April 27, 2012. All forward-looking statements included in this presentation should be considered in the
context of these risks. All
forward-looking statements speak only as of May 31, 2012, and we undertake no obligation to publicly update or
revise any forward-looking statements, whether as a result of new information, future
events or otherwise. Investors and prospective investors are cautioned not to place
undue reliance on our forward-looking statements. |
 First Prepaid
Carrier in U.S. to Offer iPhone 3
“The combination of
Apple’s iconic device
and Cricket’s industry-
leading $55 service
plan significantly
enhances our
competitive position.”
•
Combination of iPhone and attractive service plan pricing creates strong
competitive offering
–
Unlimited talk, text and 3G data for just $55 per month
•
Builds
on
our
successful
smartphone
strategy
designed
to
capture
profitable
growth
•
Demonstrates strength of our network, distribution and market position
•
Initially available over nearly 60M CPOPs
–
Presales begin June 15
–
Commercial sales begin June 22
•
No-contract
offering
and
$55
service
plan
expected
to
be
attractive
to
customers
–
iPhone 4 available for $399
–
iPhone 4S available for $499
–
Cricket customers have demonstrated willingness to pay for the right device
•
Not expected to have significant impact to OIBDA in 2012
–
Moderate subsidy per device
–
No change to current 2012 CapEx guidance
–
Product expected to positively affect business |
 Significantly
Lower Cost of Owning an iPhone with Cricket Device Cost
Average Monthly
Payment*
Total Cost Over
One Year
Total Cost Over
Two Years
$399
$55
$1,059
$1,719
$99
$110
(1)
$1,455
$2,775
Offer Provides Compelling Differentiation
4
AVERAGE
POSTPAID
CARRIER
*Unlimited talk, text and 3G web; excludes applicable sales taxes
Value seeking customers can save over $1,000 over two years
1)
Source: AT&T, Sprint and Verizon company websites |
 Extends
Smartphone Strategy to Capture Growth and Attract Value Seekers
•
Half of Cricket’s customer base currently on 3G
smart devices
–
Up from zero two years ago
–
Financial metrics reflect benefits of this strategy
•
Strong market demand for iPhones
•
iPhone currently represents ~30% of postpaid
smartphone operating systems*
–
Opportunity to capture prepaid iPhone market
share
•
Expect benefit to front door traffic, including
sales of other smart devices
–
According to third party data, iPhone positively
impacts customers’
view of carrier brand
5
Market Share of
U.S. Smartphone
Operating Systems*
*Source: comScore MobiLens Dec 2011
Enhances ability to attract and retain value-seeking customers
|
 Other Key
Considerations 6
•
Minimum purchase commitment expected to represent less than 10% of projected
handset sales
–
Three-year commitment, currently estimated to be ~$900M
–
iPhone will initially be available over nearly 60M CPOPs reaching >70% of Cricket
subscribers •
Anticipate lower churn for iPhone customers
–
Carriers report lower churn for iPhone customers
–
iPhone availability also expected to increase retention of current customers
-
Expect to revise upgrade fee with service plan refresh later this year
–
Device locked on Cricket network
•
iPhone network usage expected to be near current smartphone usage
–
Technical planning to support rollout has been completed
–
No significant changes anticipated to current network utilization
Product launch does not impact outlook discussed on Leap’s 1Q12 earnings call
|
 iPhone Fits Well
with Growth Initiatives 7
•
Important step in ongoing strategies to profitably improve
competitive position
–
Product and service plan expected to attract value seeking
consumers
–
iPhone customer loyalty anticipated to drive lower churn
–
Enhances Company’s brand
–
Improves
customer
experience
–
iPhone
has
highest
customer
loyalty in industry
•
No significant impact expected on short-term financial
performance, with anticipated long-term benefits
–
No material impact expected to OIBDA in 2012
–
No changes to current 2012 CapEx guidance
“Launching iPhone is
a major milestone for
us and we are proud
to offer iPhone
customers attractive
nationwide coverage,
a robust 3G data
network and a value
packed, no-contract
plan." |
 Question &
Answer Period 8 |