Leap, Verizon Wireless exchange spectrum
(Reuters) - Leap Wireless International Inc LEAP.O on Monday swapped wireless airwaves with Verizon Wireless in a series of deals aimed at beefing up its presence in the Chicago area.
The low-cost wireless service provider said it bought 12 MHz of 700 MHz A block spectrum in Chicago from Verizon Wireless for $204 million.
In another transaction, Leap Wireless sold to Verizon excess personal communications service and Advance Wireless Services spectrum in various markets across the U.S. for $188 million.
The company said the sale of spectrum in these deals will not impact Leap's operations in its existing operating markets.
The company's non-controlled, majority-owned venture Savary also sold AWS spectrum for $172 million. Savary will use the proceeds to prepay its debt to Leap's Cricket communication service.
"These transactions will allow us to strengthen our spectrum position in our Chicago market and receive net cash proceeds of more than $100 million, after repayment of indebtedness and estimated transaction fees," Chief Executive Doug Hutcheson said in a statement.
The company also plans to use some of the proceeds to support its deployment of LTE network technology, he added.
Last week, Verizon Wireless, owned by Verizon Communications Inc (VZ.N) and Vodafone Group (VOD.L), spent $3.6 billion to buy spectrum from top U.S. cable providers, heating up competition with the wireless company's chief rivals.
Verizon Wireless and AT&T, the No. 1 and No. 2 U.S. mobile providers, have made no secret of the fact that they need more spectrum to support increased consumer demand for videos and other data-heavy services.
Shares of San Diego-based Leap closed at $9.36 on Nasdaq on Monday.
Shares of Verizon closed at $38.05 on Monday on the New York Stock Exchange.
(Reporting by Soham Chatterjee in Bangalore; Editing by Saumyadeb Chakrabarty)
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