Cricket Wireless 2012 Annual Report Download - page 4

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2
Leap Wireless International, Inc.
Strengthening our executive leadership team (from left to right):
Jerry Elliott; Perley McBride; Doug Hutcheson; Bill Ingram; Robert Strickland; and Robert Irving.
This strategy requires a major transformation – one that we began last year and continue
today – and we are beginning to see early results. We improved Average Revenue Per
User (ARPU) as we reduced promotional retention activities and continued shifting to
a customer mix with higher-value service plans. There are also early signs that churn is
moving in the right direction. Still, we clearly have more work to do, particularly in terms
of increasing front-door activity and gross customer additions.
SHARPENING OUR FOCUS
To improve our performance, we have sharpened our focus on a number of fronts. We
upgraded our device lineup, becoming the first U.S. prepaid carrier to offer the iPhone 5®
in June and launched the popular Galaxy S® III smartphone right before the holiday
selling season.
While we continue to offer devices at a variety of price points, we have made a strategic
decision to de-emphasize our focus on low-priced, entry-level smartphones, which have
tended to attract customers who may be more likely to churn. We are being thoughtful
in how we manage and allocate our device subsidies, focusing them on devices that will
drive the best possible customer experience. To make better devices more affordable for
our customers, we introduced a third-party device leasing program in the fourth quarter
of 2012 – a critical program we expect to enhance in the coming year. We also improved
the sales and activation process in our stores, at our dealers, online and through telesales.
To drive the most meaningful results, we refined our national retail distribution and
moved from six partners to two – RadioShack and Walmart– both of which are higher-
volume national retailers that have made wireless an important part of their business.
In addition, we refocused our efforts on our flagship pay-in-advance Cricket Wireless
service because of its attractive revenue and margin profile. In the fourth quarter we
discontinued sales of our daily PAYGo™ product to focus on products with a superior