Even as mobile users eagerly await the possible release of a new iPhone at Apple's (AAPL) upcoming developers’ conference, rumors are circulating through Wall Street that AT&T (T), the sole iPhone carrier in the U.S., may be considering acquiring low-end service provider Leap Wireless International (LEAP).
Citing investor “chatter,” The Wall Street Journal’s “Heard On the Street” column, reported that AT&T may be considering buying Leap, which has grown rapidly by offering cheap subscriber plans without requiring contracts. Leap is a holding company whose brands include Cricket. As evidence, the columnist pointed out that both Leap and AT&T have canceled scheduled appearances at upcoming investor conferences.
The rumors come as AT&T is in the process of acquiring $2.35 billion in wireless assets – including 1.5 million subscribers, mostly in rural areas – from rival Verizon Wireless (VZ). Under regulatory terms of its purchase of Alltel earlier this year, Verizon is required to divest the assets.
One hurdle to the Leap acquisition would be that, while AT&T operates over a GSM cellular network, Leap is a CDMA provider. Leap has 3.8 million subscribers and a market cap of $2.7 billion.
Investors apparently like what they’re hearing about the possible acquisition: AT&T’s share price was up nearly 1 percent at its peak today, while Leap gained more than 3 percent.
