Cricket Wireless 2011 Annual Report Download - page 12

Item 1. Business
Overview
We are a wireless communications carrier that offers digital wireless services in the U.S. under the
“Cricket®” brand. Our Cricket service offerings provide customers with unlimited nationwide wireless services
for a flat rate without requiring a fixed-term contract or a credit check.
Cricket service is offered by Cricket, a wholly-owned subsidiary of Leap. Cricket service is also offered in
South Texas by our joint venture STX Wireless Operations, LLC, or STX Operations, which Cricket controls
through a 75.75% controlling membership interest in its parent company STX Wireless, LLC, or STX Wireless.
In addition, Cricket owns an 85% non-controlling membership interest in Savary Island Wireless LLC, or Savary
Island, which holds wireless spectrum in the upper Midwest portion of the U.S. and which leases a portion of that
spectrum to us.
Leap was formed as a Delaware corporation in 1998. Leap’s shares began trading publicly in September
1998, and we launched our innovative Cricket service in March 1999. Leap conducts operations through its
subsidiaries and has no independent operations or sources of income other than interest income and through
dividends, if any, from its subsidiaries.
Cricket Business Overview
Cricket Service
As of December 31, 2011, Cricket service was offered in 47 states and the District of Columbia across an
extended area covering approximately 289 million POPs. On December 31, 2011, we had approximately 5.9
million customers, and we and Savary Island owned wireless licenses covering an aggregate of approximately
181.5 million POPs (adjusted to eliminate duplication from overlapping licenses). The combined network
footprint in our operating markets covered approximately 95.3 million POPs as of December 31, 2011. The
licenses we own provide 20 MHz of coverage and the opportunity to offer enhanced data services in almost all
markets in which we currently operate.
In addition to our Cricket network footprint, we have entered into roaming relationships with other wireless
carriers that enable us to offer Cricket customers nationwide voice and data roaming services over our extended
service area. We have also entered into a wholesale agreement which we use to offer Cricket services in
nationwide retailers outside of our current network footprint. These arrangements enable us to offer enhanced
Cricket products and services, continue to strengthen our growing retail presence in our existing markets and
expand our distribution nationwide. In 2011, we significantly expanded our nationwide sales presence by
offering Cricket products and services in thousands of additional mass-market retail locations, and we expect to
continue expanding our distribution in the future.
The foundation of our business is to provide unlimited, nationwide wireless services and to design and
market our products and services to appeal to customers seeking increased value. None of our services require
customers to enter into long-term commitments or pass a credit check. The service plans we currently offer are
“all-inclusive,” with telecommunication taxes and certain fees included within the service plan price. We
introduced these “all-inclusive” service plans together with smartphones in August 2010 and we introduced our
Muve Music®service in early 2011. We believe these changes have made our services more attractive to
customers, improved our competitive positioning in the marketplace and improved our financial and operational
performance. Since their introduction, these initiatives have generally led to higher average monthly revenue per
customer and lower customer turnover, although they have also resulted in increased costs, including equipment
subsidy for new and upgrading customers and incremental service costs. On balance, we believe that the changes
we implemented to our product and service offerings have strengthened our business and are leading to greater
lifetime customer value.
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