Leap (LEAP) Paid $900M for iPhone 4, 4S Rights; Is AT&T (T) Still the Better Deal?

Shares of Leap Wireless (Nasdaq: LEAP) are popping Thursday... but should they be? Earlier the company announced its Cricket Communications unit will now be offering Apple's (Nasdaq: AAPL) iPhone 4 and 4S as new pre-paid devices, sending shares up over 7 percent in the process.

According to some comments from Leap:

• The commitment for the devices was valued at $900 million;
  
• The contract is for 3 years; and
  
• There will be no significant impact on 2012 results or capital expenditures.

Here's the deal: the 16GB iPhone 4S will be available for $499.99 and the same-sized iPhone 4 will be available for $399.99.

Hmm...that's $16.67 per month over 24 months for the iPhone 4 and $20.83 for the iPhone 4S.

The fee is $55 per month for unlimited voice and SMS. Leap also touted "unlimited data," but the company has a fair usage policy of 2.3GB per month.

Looking at AT&T (NYSE: T), the iPhone 4 is subsidized to the initial price of $99.99, or $4.17 per month for two years. In addition, users can get 3GB of data per month for about $30 and "unlimited calling and messaging to or from any mobile number in the U.S., Puerto Rico, or U.S.V.I. Messaging unlimited includes domestic text, picture, and video messages" for an extra $20 per month. Whatever that means. AT&T will also tack on $40 per month for "Nation 450 w/Rollover Minutes."

Assuming a user pays $50 per month, the cost of using AT&T for two years would be $1,299.99. For Leap, a two-year plan would cost $1,719.99. Plus, the AT&T user would get an extra 700MB of data. Adding the $40 per month for AT&T's Nationwide plan obviously brings that number up significantly (by about $959).

Although Leap shares are giving up gains, the stock remains up more than 3.5 percent.

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