Subject: [NEXTEL-1] Wireless sales sag over holidays

From: Marcel <[email-masked]>
Date: Tue, 07 Jan 2003 20:33:41 -0500

Wireless sales sag over holidays

By Tom Giles
Bloomberg News

SAN FRANCISCO — Wael Mohammad saw
firsthand that AT&T Wireless Services and
other U.S. national mobile-telephone carriers
had a slower holiday season this year.

As manager of Wireless One, a San Francisco seller of mobile phones,
Mohammad reported no increase in AT&T Wireless sales during the holiday
season over last year. Nextel Communications had a slight gain, he said.

Neither discounts nor phones with cameras and games were enough to lure new
customers, he said.

Redmond-based AT&T Wireless, New Jersey-based Verizon Wireless and rivals
probably signed up 25 percent fewer customers in the quarter compared with a
year earlier, capping the worst year for growth, analysts said.

Many people decided against buying phones amid a sluggish economic
recovery and as unemployment remains at an eight-year high, they said. Earlier
price cuts left little room for holiday discounts.

The six biggest national wireless companies probably added 3.2 million
customers in the latest quarter, said Legg Mason analyst Craig Mallitz. For
2003, new subscribers are likely

to drop to 11.2 million from 13.2 million in 2002, he said.

About 48 percent of the U.S. population has mobile phones, Merrill Lynch & Co.
analysts said. U.S. wireless companies gained 4.8 percent more customers in
the first half of 2002, the slowest rate ever, bringing total subscribers to 134.6
million, according to the Cellular Telecommunications and Internet Association.

RadioShack on Friday said sales of Sprint's PCS wireless products fell short of
predictions in November and December, an indication that the quarter was
worse than expected

Wireless companies are slashing costs and firing staff to lessen the impact of
slowing customer growth. At the same time, the carriers are offering discounts
and new features to entice subscribers.

AT&T Wireless is offering 1,000 minutes for $39.99. Bellevue-based T-Mobile
and Sprint PCS are selling phones with cameras, color displays and Internet
access.

"Pricing plans that include 1,000 minutes for 40 bucks a month scare us off the
U.S. market," said John Maxwell, an analyst at Waddell & Reed Financial,
which manages $26 billion in assets. His firm sold shares in Sprint PCS in the
first half of 2002 and is avoiding stock of most of its rivals, he said.

Some analysts have also cut forecasts for new customers at AT&T Wireless, as
well as Sprint PCS.

RBC Capital Markets analyst Jonathan Atkin expects AT&T Wireless added
517,000 customers in the fourth quarter, or just over half the 927,000
subscribers the company added in the same period of 2001. Nextel probably
added 447,000 subscribers in the fourth quarter, according to Merrill Lynch
analysts, compared with 500,900 that the Virginia-based carrier added a year
earlier.

AT&T Wireless to receive $436 million tax refund

REDMOND — AT&T Wireless Services says it will receive a $436 million tax
refund as a result of a rule that helps companies that are losing money.

The Redmond-based company will use the federal tax refund to strengthen its
balance sheet and "liquidity position," it said in a statement.

Congress passed a measure in 2002 that lets businesses apply losses
retroactively to taxes paid as much as five years ago. The refund applies to
losses incurred by AT&T Wireless in 2001. The company intends to seek a
refund on part of an expected net operating loss for 2002, spokesman David
Caouette said.

http://seattletimes.nwsource.com/html/businesstechnology/134610658_wireless07.html

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