Leap (LEAP) Announces Agreement to Acquire Chicago and Southern Wisconsin Operating Markets

SAN DIEGO, Sep 23, 2010 (BUSINESS WIRE) — Leap Wireless International, Inc., a leading provider of innovative and value-driven wireless communications services, announced today that Leap’s wholly owned operating subsidiary, Cricket Communications, Inc., has entered into an agreement to acquire all remaining interests in Denali Spectrum, LLC (Denali) and provide Cricket with ownership and control of Denali’s Greater Chicago and Southern Wisconsin markets. Cricket currently owns an 82.5% non-controlling membership interest in Denali. Under the purchase agreement, Cricket will acquire the remaining 17.5% controlling membership interest currently held by Denali Spectrum Manager, LLC (DSM).

Cricket also announced today that Denali has entered into an agreement to contribute its non-operating wireless licenses and spectrum lease to Savary Island Wireless, LLC (Savary Island), in exchange for an 85% non-controlling membership interest. Ring Island Wireless, LLC (Ring Island), will contribute cash to the venture in exchange for a 15% controlling membership interest. Savary Island is a newly-formed limited liability company that will apply to obtain its licenses as a “very small business” designated entity under applicable FCC rules. In connection with the contribution of Denali’s non-operating assets, Savary Island and its subsidiaries will assume approximately $211.6 million of the outstanding senior secured debt owed by Denali to Cricket. The closing of the transactions under the contribution agreement will occur immediately prior to the closing of Cricket’s purchase of DSM’s membership interest in Denali.

The transactions under the purchase agreement and the contribution agreement are subject to customary closing conditions, including the approval of the Federal Communications Commission. At the closing under the contribution agreement, Savary Island also will enter into a management services agreement with Cricket, pursuant to which Cricket will provide management and administrative services to Savary Island and its subsidiaries. Following the closings of these transactions, DSM will cease to own any direct or indirect equity interests in Denali or Savary Island, and DSM will have no further management of either enterprise.

“We are extremely pleased to have reached an agreement to acquire complete ownership of the Chicago and Southern Wisconsin operating markets,” said Doug Hutcheson, Leap’s president and chief executive officer. “We are also looking forward to working with our new partner, Ring Island Wireless, to realize value from the wireless licenses to be contributed to the Savary Island venture.”

About Leap

Leap provides innovative, high-value wireless services to a fast-growing, young and ethnically diverse customer base. With the value of unlimited wireless services as the foundation of its business, Leap pioneered its Cricket(R) service. The Company and its joint ventures operate in 35 states and the District of Columbia and hold licenses in 35 of the top 50 U.S. markets. Through its affordable, flat-rate service plans, Cricket offers customers a choice of unlimited voice, text, high-speed data and mobile Web services. Headquartered in San Diego, Calif., Leap is traded on the NASDAQ Global Select Market under the ticker symbol “LEAP.” For more information, please visit www.leapwireless.com.

Forward-Looking Statements

This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements reflect management’s current expectations based on currently available operating, financial and competitive information, but are subject to risks, uncertainties and assumptions that could cause actual results to differ materially from those anticipated in or implied by the forward-looking statements. Our forward-looking statements are generally identified with words such as “will,” “believe,” “expect,” “intend,” “plan,” “could,” “may” and similar expressions. Risks, uncertainties and assumptions that could affect our forward-looking statements include, among other things, our ability to obtain FCC approval of the transactions under the purchase agreement and the contribution agreement, and other factors detailed in the section entitled “Risk Factors” included in our periodic reports filed with the SEC, including our Quarterly Report on Form 10-Q for the quarter ended June 30, 2010, filed with the SEC on August 6, 2010.

All forward-looking statements included in this news release should be considered in the context of these risks. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Investors and prospective investors are cautioned not to place undue reliance on our forward-looking statements.

SOURCE: Leap Wireless International, Inc.

Leap contacts:
Amy Wakeham, Investor Relations
858-882-9876
awakeham@leapwireless.com
or
Greg Lund, Media Relations
858-882-9105
glund@leapwireless.com