Subject: [NEXTEL-1] Carriers Eye Nextel's Niche Phone Service

From: Marcel <[email-masked]>
Date: Tue, 25 Feb 2003 02:48:19 -0500

Carriers Eye Nextel's Niche Phone Service
By Nicholas Johnston
Washington Post Staff Writer
Tuesday, February 25, 2003; Page E05

Nextel Communication Inc.'s cell phone that can be used as a
walkie-talkie has been considered a niche product. But not for
much longer, as two big competitors are racing to match Nextel's
increasingly popular service.

AT&T Wireless Services Inc. will test market a cell phone with
walkie-talkie features in Seattle during the fourth quarter, Chief
Financial Officer Joseph McCabe Jr. said at a Merrill Lynch
investors conference in New York, according to Bloomberg News. Two
weeks ago Verizon Wireless Inc., which has the most mobile-phone
subscribers in the United States, said it would introduce a
similar service this year. Alltel Corp. and Sprint Corp.'s
wireless division are also working on similar phones.

The brutally competitive telecommunications industry took notice
late last week of Nextel's fourth-quarter profit -- $1.5
billion -- and its stunning turnaround from a year ago, when
bankers urged the Reston-based company to consider reorganization
under the protection of federal bankruptcy laws.

By focusing on business customers, who spend more per capita than
residential users, and by cutting its debt, Nextel has been able
to report profits for three consecutive quarters while the rest of
the mobile-phone industry has foundered. Nextel chief executive
Timothy M. Donahue said at the same conference yesterday that the
company will reduce its capital spending to $1.2 billion from
about $1.8 billion this year because its network is operating more
efficiently.

AT&T spokesman Mark Siegel confirmed the test marketing of the
hybrid phones yesterday, though he called it "very preliminary."

Qwest Communications International Inc. is in talks to sell or
find a partner for its wireless business, chief executive Richard
C. Notebaert said at the same conference, Bloomberg News reported.
Qwest's wireless unit lost about 82,000, or 7.3 percent, of its
subscribers in the fourth quarter, and monthly revenue per
customer fell to $45 from $51. In contrast, Nextel's revenue per
customer was $69 in the fourth quarter. The Qwest unit, with about
1 million subscribers, may fetch $500 million to $700 million,
analysts have said. The business operates in 14 markets that
include Phoenix, Denver and Seattle.

http://www.washingtonpost.com/wp-dyn/articles/A62236-2003Feb24.html

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