~Total Customers Increase by

212,000 Including Acquisition~

~Also Reports 42 Percent

Year-Over-Year Improvement in Existing Business Adjusted OIBDA~

Note: A webcast of Leap’s conference call

and accompanying presentation slides will be available at 8:30 a.m. EDT

today at http://investor.leapwireless.com.

SAN DIEGO–(EMWNews)–Leap Wireless International, Inc. (NASDAQ:LEAP), a leading provider of

innovative and value-driven wireless communications services, today

reported financial and operational results for the quarter ended June

30, 2008. The Company achieved approximately 171,000 net customer

additions in the second quarter of 2008, including approximately 44,000

net customer additions for voice services in existing markets,

approximately 116,000 net customer additions for voice services in

recently launched markets and approximately 11,000 net customer

additions associated with mobile broadband service, bringing total

broadband customers to 14,000. Including customers acquired in

connection with the Company’s acquisition of

Hargray Wireless, total customers increased by nearly 212,000. Churn for

the quarter was 3.8 percent, an improvement from 4.3 percent from the

prior year period. Net customer additions and churn exclude customers in

South Carolina and Georgia markets acquired from Hargray Wireless during

the quarter.

The Company’s operating income for the quarter

was $14.5 million, compared to $30.7 million for the second quarter of

2007. The Company reported adjusted operating income before depreciation

and amortization (OIBDA) of $106.7 million, down $2.3 million from the

comparable period of the prior year. The year-over-year reduction in

adjusted OIBDA reflects the impact of expected initial operating losses

from the Company’s investments in new

initiatives, which included the launch of new markets covering

approximately eight million covered POPs, pre-launch expenses associated

with anticipated future market launches and the expansion of its mobile

broadband service into markets currently serving approximately 23

million covered POPs. Offsetting the initial losses associated with

these investments were significantly increased financial contributions

from the Company’s existing markets (defined

as markets in operation at the end of 2007). For the quarter, Existing

Business Adjusted OIBDA was $154.5 million, an increase of $45.5

million, or 42 percent, from the prior year period. This increase

reflects an approximately 460,000 year-over-year increase in

end-of-period customers in existing markets and the resulting benefits

of scale.

“Our overall customer activity was solid, even as our customers absorbed

the effects of a challenging macroeconomic environment,”

said Doug Hutcheson, Leap’s president and chief executive officer. “The

Company delivered solid year-over-year improvements in Existing Business

Adjusted OIBDA, further demonstrating the underlying strength of our

business and the success of our existing market growth programs. We are

also very pleased with the pace and performance of our new initiatives,

including our recent new market launches and our Cricket Wireless

Internet Service. The performance of each of these initiatives is

meeting or exceeding our expectations, and we anticipate significant

improvements in long-term customer penetration and the resulting

financial contributions from these key investments over time.”

Financial Results and Operating Metrics (1) (2)
(Unaudited; in millions, except for customer data, operating metrics and per share amounts)
		Three Months Ended June 30,											Six Months Ended June 30,
		2008				2007				Change			2008				2007				Change
Service revenues		$	417.1			$	347.3			20.1	%		$	816.1			$	668.9			22.0	%
Total revenues		$	474.9			$	397.9			19.4	%		$	943.2			$	791.3			19.2	%
Operating income		$	14.5			$	30.7			(52.8	%)		$	40.5			$	29.2			38.7	%
Adjusted OIBDA		$	106.7			$	109.0			(2.1	%)		$	225.4			$	184.1			22.4	%
Adjusted OIBDA as a percentage of service revenues			26	%			31	%		—				28	%			28	%		—
Existing Business Adjusted OIBDA		$	154.5			$	109.0			41.7	%		$	289.4			$	184.1			57.2	%
Net income (loss)		$	(26.1	)		$	9.6			—			$	(44.2	)		$	(14.6	)		—
Diluted net earnings (loss) per share		$	(0.38	)		$	0.14			—			$	(0.65	)		$	(0.22	)		—
Gross customer additions			542,005				462,434			17.2	%			1,092,525				1,027,489			6.3	%
Net customer additions			171,171				126,791			35.0	%			393,131				445,137			(11.7	%)
End of period customers			3,305,251				2,674,963			23.6	%			3,305,251				2,674,936			23.6	%
Weighted-average customers			3,162,058				2,586,900			22.2	%			3,059,252				2,490,030			22.9	%
Churn			3.8	%			4.3	%		—				3.8	%			3.9	%		—
End of period covered POPs		~ 61.7				~ 50.7				21.7	%		~ 61.7				~ 50.7				21.7	%
Average revenue per user (ARPU)		$	43.97			$	44.75			(1.7	%)		$	44.46			$	44.77			(0.7	%)
Cash costs per user (CCU)		$	21.01			$	19.87			5.7	%		$	21.36			$	20.54			4.0	%
Cost per gross addition (CPGA)		$	205			$	182			12.6	%		$	182			$	173			5.2	%
Cash purchases of property and equipment		$	181.1			$	106.1			70.7	%		$	338.3			$	239.4			41.3	%
Unrestricted cash, cash equivalents and short-term investments		$	934.4			$	683.8			36.6	%		$	934.4			$	683.8			36.6	%

(1)		The foregoing results and operating metrics reflect the operations of Cricket markets for the periods indicated and markets in South Carolina and Georgia acquired from Hargray Wireless on April 1, 2008, except for net customer additions and churn. The Company is currently upgrading the Hargray Wireless networks it acquired in South Carolina and Georgia. Until the Company completes the upgrades and introduces Cricket service in these markets, the Company will report its results for net customer additions and churn without customers in the Hargray markets. The Company currently expects to begin incorporating the results of the Hargray markets into its results for net customer additions and churn beginning in the first quarter of 2009.
(2)		For a reconciliation of non-GAAP financial measures, please refer to the section entitled “Definition of Terms and Reconciliation of Non-GAAP Financial Measures” included at the end of this release. Information relating to population and potential customers (POPs) is based on population estimates provided by Claritas Inc. for the relevant year.

Discussion of Financial and Operational Results for the Quarter

• Customer churn in Cricket markets for the quarter was 3.8 percent, an

  improvement from 4.3 percent in the comparable period of the prior

  year, reflecting increased customer tenure in markets launched in the

  first half of 2007, additional customers added as a result of our new

  market launches and the seasonal rhythms of the business. The Company’s

  churn performance also reflects an increase in both customer

  deactivations and reactivations during the quarter.

• ARPU for the quarter was $43.97 and reflected expected customer uptake

  of the mix of new rate plans launched in the quarter, offset by the

  dampening effect to second quarter revenue of greater customer

  deactivations and reactivations in the quarter.

• Service revenues increased 20 percent year-over-year, and 5 percent

  over the first quarter of 2008, to $417 million. These increases were

  the result of a 22.2 percent year-over-year increase in

  weighted-average customers due to new market launches and existing

  market customer growth, offset by a 1.7 percent year-over-year decline

  in ARPU.

• Second quarter 2008 operating income of $14.5 million decreased by

  $16.2 million over the comparable period of the prior year, reflecting

  the impact of additional depreciation expense and the investments the

  Company is making to support the its new initiatives.

• Net loss for the second quarter was $26.1 million, or ($0.38) per

  share, compared to net income of $9.6 million, or $0.14 per diluted

  share, for the comparable period of the prior year. Net loss of

  ($0.38) per share for the quarter included the effect of approximately

  $0.70 per share of negative adjusted OIBDA associated with the Company’s

  new initiatives.

• Capital expenditures during the second quarter of 2008 were $181.1

  million, including expenditures associated with the build-out of new

  markets and capitalized interest.

Other Key Operational Highlights

• Completion of the Company’s acquisition of Hargray Wireless, a

  wireless telecommunications company providing service to approximately

  600,000 covered POPs in Savannah, Ga., Hilton Head, S.C. and

  surrounding areas.

• Issuance of $550 million of new debt, consisting of $300 million in

  aggregate principal amount of 10 percent senior notes due 2015 and

  $250 million in aggregate principal amount of 4.5 percent convertible

  senior notes due 2014, resulting in net proceeds of approximately

  $535.8 million.

• Successful launch of Cricket unlimited wireless voice service in St.

  Louis, South Texas, Las Vegas, and Oklahoma City, completing the

  planned launch of approximately eight million covered POPs by the end

  of the second quarter of 2008.

• Launch of Cricket Wireless Internet Service in 16 markets in the

  second quarter bringing the total number of broadband markets to 25

  and the total number of covered POPs to 23 million as of June 30,

  2008, providing high-speed mobile broadband service for a low, flat

  rate with no long-term commitments or credit checks.

• Appointment of Walter Berger as the Company’s executive vice president

  and chief financial officer, with responsibility for all financial

  activities of the Company including accounting, treasury, financial

  planning and reporting, investor relations, and overseeing internal

  audit. The Company also appointed Al Moschner as the

  Company’s executive vice president and chief operating officer, with

  responsibility for all sales and marketing activities, information

  technology and technical operation functions, as well as supply chain

  management. The company also announced that Glenn Umetsu, as the

  Company’s executive vice president and chief technical officer, will

  now lead all strategic programs and projects, new market launches and

  technology planning. In addition, the Company appointed Jeff Nachbor

  as senior vice president, financial operations and chief accounting

  officer as the Company continues to expand its accounting organization.

“During the first half of 2008, the Company

made significant progress refining and validating our current programs

to strengthen our existing business and to expand the scope of our

business through new initiatives,” continued

Hutcheson. “First, the Company continues to

execute on programs to expand our existing business, such as our

initiatives to enhance our existing footprint and improve market level

presence. The expected success of these programs, coupled with the

underlying organic growth in our existing markets, is reflected in the

penetration targets we are announcing today for our existing business.

Second, early customer penetration in our recently launched markets

indicates we are heading in the right direction and, as a result, we

have updated our guidance to provide investors with a more detailed view

into the early financial and operational results we expect from our new

markets. Finally, the early results from our mobile broadband initiative

remain promising and today we are announcing further expansion plans for

this program which we believe will provide significant benefits in the

future.”

Updated Business Outlook

The Company updated its previously announced business expansion outlook

to reflect the following:

• Customer penetration for voice services in the Company’s

  existing markets in aggregate is expected to reach between 8 percent

  to 9 percent by the end of 2010. This forecast does not include the

  effects of the Company’s mobile broadband

  initiative.

• Annual capital expenditures to support the on-going growth and

  development of the Company’s markets in

  commercial operation for one year or more are expected to be in the

  mid-teens as a percentage of service revenue. This estimate may be

  affected by capital expenditures for footprint enhancement in existing

  markets. The Company may provide additional updates as it finalizes

  plans to develop additional sites.

• With its planned launches of AWS markets and coverage expansion in

  existing markets, the Company and its joint venture, Denali Spectrum,

  LLC, expect to increase network coverage, in each case measured on a

  cumulative basis from January 2008, by up to 36 million additional

  POPs by the first half of 2009, and up to 50 million additional POPs

  by the end of 2010.

• Aggregate capital expenditures for the build-out of new markets

  through their first full year of operation following commercial launch

  are anticipated to be approximately $25 per covered POP, excluding

  capitalized interest.

• Aggregate investment in OIBDA loss in newly launched markets through

  adjusted OIBDA break-even for these markets in aggregate is expected

  to be approximately $6 per covered POP. The OIBDA loss for a single

  new market through adjusted OIBDA breakeven in that market is expected

  to be approximately $7 per covered POP. The Company’s

  new markets are generally expected to reach adjusted OIBDA break-even

  within four quarters of commercial operation.

• To

  Leap Wireless International, Inc. Greg Lund, Media Relations 858-882-9105 [email protected] or Amy Wakeham, Investor Relations 858-882-6084 [email protected]

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