Leap Wireless adds only 36,500 subs in Q3 as markets mature.

Leap Wireless’s fast growth in 2007 has slowed down to a trickle. After adding 318,000 net subscribers in the first quarter and 127,000 in the second, Leap tacked on only 36,500 subscribers to the total in the third quarter.

Leap’s fast pace of growth was expected to slow down somewhat because Leap launched service in only three new markets this year: Charleston, S.C.; Raleigh-Durham, N.C.; and Rochester, N.Y. In 2006, Leap went on a launch spree, expanding into large metro areas such as Austin, Texas; Cincinnati; Houston; Kansas City, Mo.; San Antonio and Portland, Ore. Those dozen or so market launches drove subscriber gains to a record 592,000 for the year. Leap sells all-you-can-eat local wireless plans under the name Cricket Wireless.

The maturing of its current footprint wasn’t the only reason for Leap’s slowing growth, though. Leap’s churn rate continues to rise — an extremely high 4.4% last quarter compared to 4.3% in the second quarter and 3.8% in the same quarter last year. In comparison, the highest churn rate for Tier 1 operators belongs to Sprint at 2.3%, while AT&T and Verizon Wireless are well under 2%.

Leap is correcting those problems, said Doug Hutcheson, the company’s president and CEO. He expects its churn to increase once again in the fourth quarter, possibly rising as high as 4.7%, but he chalks this up to seasonal rhythms as customers change out their service providers with their new phones during the holidays. Those same seasonal rhythms will also send more business Leap’s way. The company projected between 70,000 and 130,000 net subscriber adds in the fourth quarter.

“While we experienced changes in customer buying patterns during the third quarter which affected our near-term customer growth rate, we believe that the long-term prospects for our business remain bright,” Hutcheson said in a statement. “The company has seen attractive post-Thanksgiving results that indicate we are on the right track for our expected fourth-quarter customer additions, reinforcing our belief that our efforts to drive further return for the business are progressing as expected.”

On the financial side, Leap’s loss widened substantially in the third quarter to $43.3 billion, compared to $800,000 last year. Leap attributed the huge loss to taxes and expenses resulting from changes in its accounting method. Leap is restating its earnings for the last three years. The company, however, saw a 40% boost in revenue year-over-year to $409.7 million, driven largely by the huge influx of customers in late 2006 and early 2007. But improved average revenue per user also contributed to the revenue boon, rising 3.8% year-over-year to $44.51 per month.

Leap ended the quarter with 2.71 million customers in total, still a tiny number compared to the 50 million-plus subs of large Tier 1 operators and still relatively small compared to its Tier 2 competitors. Leap turned down the opportunity to merge with its fellow Tier 2 provider MetroPCS, claiming Metro’s offer severely undervalued Leap’s assets and business model.

Leap, however, will have the opportunity to grow on its own next year. It is building out new networks in the Midwest and Northeast using new spectrum acquired in the Advanced Wireless Services auction. And earlier this week, Leap said it agreed to buy Hargray Communications’ wireless assets in Hilton Head, S.C., and Savannah, Ga., for $30 million. Though the companies did not say how many customers Leap would gain in the transaction, Leap will gain its 15 MHz of spectrum covering 817,000 pops, most of which is covered by Hargray’s CDMA network.