Pocket Communications May Pose Challenge to Leap Wireless’ Low-Cost Service

11/25/08Follow @bvbigelow

A startup flat-rate wireless provider out of Texas may have San Diego’s Leap Wireless (NASDAQ:LEAP) in its sites.

Pocket Communications, a no-frills wireless service provider in San Antonio, announced today it has raised $100 million in venture funding to establish a broad footprint for its unlimited wireless service in the Northeast. Xconomy’s Wade Roush provides details on the financing here.

Leap’s Cricket has been competing against Pocket for nearly three years in the San Antonio area, where Pocket says it has become Texas’ fastest-growing flat-rate wireless company, with more than 250,000 subscribers. Cricket is in 11 other Texas communities, including Austin, College Station and Houston.

With its latest buildout, Pocket plans to provide its wireless services in a broad corridor that includes Hartford and New Haven, CT, Springfield and Pittsfield, MA and Poughkeepsie, NY. Leap’s Cricket is established in the New York cities of Buffalo, Rochester and Syracuse, but the company has no presence in Massachusetts or Connecticut.

Comments by Matt Niehaus of Battery Ventures, the Boston venture firm that lead Pocket’s $100 million in financing, suggest that Pocket plans to create broader corridors for its networks than Leap’s strategy of providing service in discrete cities.

Perhaps more importantly, Pocket’s founder and CEO Paul Posner told GigaOm he can undercut rivals Leap and MetroPCS on pricing and still make a profit.

Bruce V. Bigelow is the editor of Xconomy San Diego. You can e-mail him at bbigelow@xconomy.com or call (619) 669-8788 Follow @bvbigelow

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