Leap Wireless International (NASDAQ: LEAP) provides wireless communication services through its Cricket and Jump Mobile brands. Leap differs from traditional carriers such as Verizon Wireless and AT&T Wireless in offering pre-paid, unlimited wireless plans. The company targets youth and minority markets, and its payment structure means customers avoid credit checks and contracts.^[1]

While Leap is more exposed to low-income demographics than its industry peers, 65% of the wireless provider's customers rely on Leap for their only phone service.^[2] This dependence helps cushion the company from U.S. economic conditions, because Leap's customers view their phone bill as non-discretionary spending. However, customers do not have contracts with Leap, which creates pricing pressure that intensifies in a recession. The lack of contracts means Leap's customers will switch to alternatives such as landlines, VoIP, or plans offered by Leap's direct competitors, MetroPCS and Sprint Boost Mobile, if they view these plans as a better value.

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