Summary:

AT&T had to make a few concessions to get the deal approved, but they were a small price to pay for the big spectrum haul Ma Bell will gain in key markets.

ATT flagship store logo
photo: AT&T

Leap Wireless is no more, though it’s Cricket brand will live on. AT&T on Thursday gained the Federal Communications Commission’s official stamp of approval for its $1.2 billion takeover of Leap, one of the last remaining large regional operators in the country. Since the U.S. Department of Justice never weighed in with any antitrust objections, AT&T  finalized  the deal late this afternoon.

Leap ran Cricket Communications, a prepaid operator with 4.6 million customers operating in small and mid-sized markets all over the country as well as in several big cities like Chicago, Houston and Las Vegas. AT&T isn’t so much interested in Leap’s customers as it is Leap’s spectrum, which occupies the same bands in which Ma Bell is deploying its newest LTE systems. Leap’s CDMA network probably isn’t long for this world.

AT&T plans maintain the Cricket brand for its prepaid services. In fact, in the coming weeks it plans to relaunch Cricket over its GSM, HSPA+ and LTE networks, running it in parallel with its CDMA operations.

AT&T and Leap's combined spectrum holdings as compiled by Mosaik

AT&T and Leap’s combined spectrum holdings as compiled by Mosaik

The FCC did have some concerns about what the demise of the country’s largest independent prepaid operator would mean for competition in the budget end of the mobile market. As one of the conditions of the deal AT&T pledged to maintain a $40 unlimited text and talk plan with 500 MB of data for the next 18 months. AT&T also said it would honor all of Cricket’s existing customer plans for as long as Leap’s CDMA network lives, though as I just mentioned, that network is about to enter hospice care.

AT&T also agreed to launch its LTE service in markets where Leap has clear spectrum, and it agreed to divest airwaves in 12 markets where it was over federally mandated spectrum limits. In all, though, AT&T made relatively few concessions to get this deal closed. Most of what it agreed to was likely already in its roadmap, and what wasn’t was a small price to pay to get its hands on Leap’s valuable airwaves.

For instance in Chicago, Leap owns a 10 MHz chunk of the Advanced Wireless Service band as well as 700 MHz licenses. Once added to its Chicago network, AT&T will be able to use its new carrier aggregation technologies to amp up network speeds and capacity to 150 Mbps, rivaling Verizon’s new upgraded network in the Windy City.

This post was updated at 4:30 PM PT with information about AT&T finalizing the Leap transaction.

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