2008 Performance
We believe Leap is well positioned as a value leader in changing economic environments, including the challenging one we entered last year. Our successes in 2008 were backed by the continuing strength of our balance sheet, which gives us financial resources to fund our growth. Last year we gained approximately 942,000 net customer additions, ending the year with 3.84 million customers from coast to coast. In early 2009, we reached 4 million customers. Our year-over-year customer growth rate of 34 percent was the second highest in the wireless industry. As part of this growth, our service revenues rose 23 percent for the year to $1.7 billion. People turned to us for value and the ability to help control their costs with our predictable, flat-rate plans. Our results reflect the strength of our business and its ability to perform in a challenging economic environment.
Existing Business Performance
We are especially pleased with our ability to increase penetration in our existing markets – which we define as those in operation as of December 31, 2007 – which speaks to the staying power of our business. We strategically enhanced our footprint, adding cell sites for better coverage. We aligned our retail distribution to more closely match our target demographic. We raised awareness with targeted sales and marketing efforts. The response from customers has been very encouraging and confirms that these investments were the right ones to make. In the markets where we made further investments to expand and enhance our network, improve our distribution, and increase marketing and awareness, we increased customer penetration approximately 100 basis points year-over-year, nearly double the year-over-year increase in the existing markets that we did not invest in. Our existing business continued to perform well and generated adjusted operating income before depreciation and amortization (OIBDA) of $586 million for the year, an increase of approximately 49 percent over 2007, the highest growth rate of any U.S. wireless carrier.