Leap Wireless International Inc.(LEAP), a leading provider of digital wireless communication services in the U.S. primarily through its wholly-owned subsidiary Cricket Communications Inc. (popularly known as “Cricket”), is set to launch another Android-based smartphone ZTE Score.
The new ZTE Score has been developed by popular Chinese-based telecom equipment manufacturer ZTE Corporation and will be available in Best Buy Co., Inc. (BBY) stores across the U.S from September, 25. The new handset is priced at $129.99.
The new 3G-based device is powered by the popular Android 2.3 version and features a 3.2 MP (Mega Pixel) camera. The new device also boasts LEAP’s most popular “Muve Music” service, which will allow its users to download unlimited music.
Earlier, Leap Wireless introduced their unlimited music download facilities for its 3G wireless subscribers. The new digital music service is called “Muve Music” and is presently across all its existing markets through its smartphone devices. ZTE Score will be the seventh smartphone to be launched under the Cricket brand.
Leap Wireless offers quality service plans to its customers at attractive rates. The company also plans to launch their LTE 4G service going forward. Continuous launch of smartphones coupled with its unlimited music download facility, which has already attracted more than 200000 music lovers and has placed them just behind Rhapsody, another online music service provider with 800000 subscribers, may act as positive catalysts for growth.
Despite such positive traits, we remain cautious regarding Leap Wireless as it faces intense competition from other carriers like America Movil’s(AMX) Tracfone and MetroPCS(PCS), which also offer such attractive plans. Furthermore, given the company’s huge debt and poor financial results in the last quarter, we prefer to remain on the sidelines.
We, thus, maintain our long-term Neutral recommendation for Leap Wireless International Inc. Currently, Leap Wireless International Inc has a Zacks #3 Rank, implying a short-term Hold rating on the stock.
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