US MNO consolidation continues with Leap/AT&T

Ironically Leap opposed the T-Mobile & AT& T merger in 2011

How things change in a short space of time. A relative US MNO [Mobile Network Operator] minnow, Leap Wireless International (NASDAQ: LEAP) looks set to be acquired by AT&T for $1.2 billion. The acquisition will give AT&T all of Leap’s assets, including a modest five million subscribers. Leap, of course, utilises the Cricket brand and is regarded as a significant player in the US pre-paid market where AT&T feels it is weak.

Ironically Leap opposed the T-Mobile USA & AT&T merger back in 2011 (see here).

AT&T expects the deal to get passed both the FCC and the US Department of Justice which will review the terms of the deal.

Naturally, once the deal goes through AT&T plans to expand Leap’s services to include its own LTE network.

Yet again, rumours have emerged that AT&T’s real interest in expansion is actually in Europe rather than the USA.

The US MNO regards the relative lack of 4G in Europe as a big opportunity.  Allegedly it is looking at major players such as Vodafone and Telefonica.

GoMo News, however, thinks that AT&T misunderstands the dynamics of the European cellular market and views roaming fees as a bad thing.

The reality is that roaming is a valuable source of revenue to most global MNOs.

Given that the vast majority of North Americans don’t take their holidays [vacations] abroad, it’s not the sort of revenue the MNO is accustomed to.

However, AT&T is not alone in its misunderstanding of the dynamics of roaming for European MNOs.

The EU’s commissioner for telecoms – Neelie Kroes, wants to see high roaming charges phased out.

However, it is MNOs based in some of the EU’s weaker economies – such as Greece, Portugal and Spain who would lose out on roaming revenues.

That’s because they experience high numbers of tourists on their networks in the Summer months – the majority of whom come from Northern Europe.

About Tony Dennis

Tony is currently Editor of GoMobile News. He's a veteran telecoms journalist who has previously worked for major printed and online titles. Follow him on Twitter @GoMoTweet.
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