Leap Wireless spun off from Qualcomm Inc. in 1998, but hasn’t until today offered its Cricket-branded wireless service in its hometown of San Diego.
It was a matter of spectrum. “Spectrum,” in case you were wondering, has to do with those electromagnetic radio frequencies used to transmit sound, data and video. The FCC and the National Telecommunications and Information Administration manage the use of spectrum because demand is high but supply is limited.
Sometimes spectrum in San Diego was too expensive, and sometimes, says Leap spokesman Greg Lund, it just wasn’t for sale.
That changed with the Federal Communications Commission’s Auction 58, which ended in February 2005. Leap spent $166.9 million in that auction, for the use of 13 spectrum licenses, including for the San Diego market. With spectrum acquired in that same auction, Leap will roll out Cricket service in Portland, Ore. next week, says Lund.
It’s all part of a wide-reaching market expansion for Leap. In a more recent FCC auction, known as Auction 66, Leap spent just under $1 billion for some 100 licenses. That expansion has impacted Leap’s earnings, though Lund says Leap is being careful to expand into markets “where it makes sense.”
The Cricket service is a little different than some of the other wireless offerings out there. There are no annual contracts or credit checks, and all local calls and text messaging are covered under one flat fee. Lund says Cricket has appeal among low-income, young and minority customers.
Leap doesn’t do a lot of marketing for Cricket, except when it launches in a new market. To debut Cricket in San Diego, Leap has advertised the wireless service on TV, radio, in print ads and on billboards. The local company also has some marketing events planned, including a Starbucks coffee giveaway today at the San Ysidro border crossing and a “fastest text-messager” contest that will culminate Dec. 16th at Westfield Mission Valley shopping mall.