Cricket Wireless 2011 Annual Report Download - page 3

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For Leap, 2011 was a year of execution. We focused on smart growth by delivering smart devices,
innovative products like our Muve Music® service, and a major expansion in our national retail channel.
The result was improved performance across the board.
Smartphone uptake rose dramatically, attracting customers to our higher-value rate plans. By year end,
we achieved industry-leading growth in quarterly average revenue per user (ARPU) of nearly $4 year
over year, while improving churn by nearly 100 basis points. Together, these changes have increased
customer lifetime value, as we predicted. With more than 500,000 customers at year end, Muve Music
skyrocketed to become the second-largest digital music subscription service in the United States in less
than a year.
Now we are targeting higher penetration by enhancing the customer experience, expanding distribution,
refining our device and service plan line-up, and increasing brand awareness. With each initiative, we are
building on our strong position to innovate value on a national scale.
STRATEGIC PROGRESS
In 2010, we transformed our business by rolling out smart devices, nationwide voice and 3G data
coverage, and value-rich rate plans that include taxes and fees. In 2011, we continued executing on our
strategy to deliver solid results.
It was a year of progress, both operationally and financially. In the fourth quarter of 2011, approximately
60 percent of our new handset sales were for smartphones and Muve Music devices – double the
per cen tage in the prior-year period. By year end, approximately 40 percent of our voice customers were
using smart devices and two-thirds of our customer base were subscribing to our monthly service plans
of $45 or higher.
Our operational improvements drove impressive year-over-year financial performance. With an
expanding customer base and higher ARPU, service revenues were up 14 percent along with a nearly
30 percent increase in calculated contribution per user (CCPU). We also increased our cash generation,
with nearly $30 million in additional adjusted operating income before depreciation and amortization
(OIBDA) year over year.
DEAR fellow stockholder:
S. Douglas Hutcheson
President, Chief Executive Offi cer and Director
Leap Wireless International, Inc.