This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Fewer Customers Leaves Leap Facing iPhone Glut

Stocks in this article: PCS LEAP AAPL

NEW YORK ( TheStreet) - Wireless company earnings season is revealing that some of are having trouble keeping customers satisfied -- or even keeping customers.

This country's number four major provider, T-Mobile USA, just reported in its fourth-quarter financials that, despite some signs of growth in its prepaid customer rolls, they continue to lose contract customers. The bottom line: a revenue decline of $1 billion for the year, leading to an overall operating loss of $6.4 billion. That's up from a $4.3 billion setback in the previous year.

It remains to be seen whether T-Mobile's upcoming merger with MetroPCS (PCS) will solve that problem, with that pairing set to be completed next month.

Meanwhile Leap Wireless International (LEAP) and its pre-paid cellular operation Cricket lost more than 600,000 subscribers last year, which has left the company with a surprisingly large backlog of Apple (AAPL) iPhones.

According to the Wall Street Journal, Cricket's excess iPhone inventory is worth some $100 million, and is expected to grow even larger.

Cricket/Leap has a three-year, approximately $800 million contract in place with Apple, which includes set purchase amounts of smartphones per year. Unfortunately for Leap, Cricket appears to be on track to sell only half of this year's allotment -- and its commitment to purchase iPhones increases in the second and third years of that contract.

Officially, Leap blames its shortfalls on ever-increasing competition and "overall softness in the wireless industry."

Cricket currently sells the iPhone 5 for $499 (remember there's no contract) with prepaid service plans starting in the $50 a month range.

--Written by Gary Krakow in New York.

>To submit a news tip, send an email to:

Gary Krakow is TheStreet's senior technology correspondent.

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,779.11 +0.96 0.01%
S&P 500 2,061.23 +48.34 2.40%
NASDAQ 4,748.3960 +104.0840 2.24%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs