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Feb. 2, 2010

Some rumors suggest that Leap Wireless International could be in the market to sell its business or possibly merge with another wireless carrier.

The Wall Street Journal is saying that Leap has hired a few advisers and formed a special board committee to evaluate its options.

Citing some individuals familiar with the matter, the Journal says Goldman Sachs was hired to advise Leap Wireless as it looks at its various options.

The concept of Leap Wireless selling its business or otherwise merging with another mobile carrier comes up quite frequently.

In September of 2007, the company rejected an unsolicited proposal from MetroPCS Communications to merge.

Then a year later, the two reached a national roaming agreement and settled litigation related to intellectual property.

A Leap Wireless spokesman said the company doesn't comment on rumors or speculation.

According to the WSJ, Leap's advisers have been "testing the waters" of larger wireless carriers such as AT&T and Verizon Wireless to see if they would be interested in acquiring the company.

If merger talks were to progress further, any transaction would likely face tighter scrutiny by the FCC than years past. The largest wireless carriers already have acquired many smaller ones – through deals approved by previous commissions – and the current composition of the FCC has signaled an aggressive stance in overseeing the competitiveness of the mobile service industry.

According to the WSJ, Leap's committee to assess strategic options includes Ronald Kramer, William Roper and former CEO of Nextel Partners John Chapple.

Leap reports its fourth-quarter results on Feb. 25.

At the end of the 2009 third quarter, the no-contract carrier reported about 116,000 net new customer additions.

Leap stock was up about 13.2 percent yesterday after the Wall Street Journal reported that the company is once again exploring its merger options. The stock is down a bit today, however.

Similarly, Verizon Wireless and AT&T Mobility are often mentioned as likely partners, but both mobile carriers would face increased scrutiny from federal regulators who already worry too much that the nation's No. 1 and No. 2 operators have too much influence in the wireless industry.

We will continue to monitor this and other news as they become available.

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Source: The Wall Street Journal.