Late last year, telecom giant AT&T (NYSE: T ) said it would acquire Leap Wireless (NASDAQ: LEAP ) for $1.2 billion in cash. This comes years after AT&T's infamous failed attempt to buy T-Mobile (NYSE: TMUS ) . The deal between AT&T and Leap is expected to close by the end of this month. However, it now looks as though T-Mobile is eating Leap's lunch, with Leap having lost 745k customers last year. Leap also posted about $1.1 billion in net losses over the past three years.
So why in the world would AT&T want to continue with this deal? In this segment from Friday's Tech Teardown, host Erin Kennedy and Motley Fool tech analyst Evan Niu take a look at the merger and how it couldn't have come at a better time for Leap shareholders. Evan also notes that for AT&T, the deal was never about buying Leap's customers, but about gaining more spectrum, and holding a stronger prepaid brand name in Cricket. AT&T's massive footprint should also solve Cricket users' biggest complaint, that the service doesn't have adequate coverage.
Telecom investors: So who really wins the smartphone war?
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