Subject: [NEXTEL-1] Nextel Lowers 03 Subscriber Est to 1.7M v. 02 Est.

From: [email-masked]
Date: Wed, 21 May 2003 23:36:47 -0400

http://biz.yahoo.com/rc/030520/telecoms_nextel_3.html

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UPDATE - Nextel sees solid future, stock climbs
Tuesday May 20, 5:48 pm ET

By Yukari Iwatani

(Rewrites first paragraph, adds closing stock price)
NEW YORK, May 20 (Reuters) - The chief executive of Nextel
Communications Inc. (NasdaqNM:NXTL - News) on Tuesday said the wireless
telephone company's business looks very solid and affirmed its
outlook for the year, pushing its stock up almost 4 percent.

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The fifth-largest U.S. wireless telephone company has
bucked a slowdown in the wireless industry thanks to the
popularity of its Direct Connect feature, a service also known
as push-to-talk, which offers direct radio contact between
subscribers. It is used by technicians, construction crews and
public-safety officials, as well as corporate subscribers.
"It looks very solid from where we stand, so you should
expect good things to continue from a performance perspective
at Nextel," Chief Executive Tim Donahue told a conference of
Wall Street analysts.
Donahue said Nextel expects to post earnings of 75 cents a
share or more this year and to add at least 1.7 million net new
customers.
"We have every reason to believe we'll get there and there
may be (other) opportunities as well," he said.
COMPETITION HEATS UP
Nextel has held a virtual monopoly in offering push-to-talk
but rivals Verizon Wireless (London:VOD.L - News; NYSE:VZ - News), AT&T Wireless
Services Inc. (NYSE:AWE - News) and Sprint PCS Group (NYSE:PCS - News) plan to
launch similar services later this year.
The growing competition has raised questions among some
analysts about Nextel's ability to continue to post strong
profits as well as industry-leading revenue per user and
customer turnover rates.
But Donahue said 37 percent of Nextel's customers have
expressed an interest in a new nationwide version of the
walkie-talkie service, called Nationwide Direct Connect. The
service, which will allow users to connect with anyone across
the country, not just a certain region, is to be launched in
August.
Eventually, Nextel may launch a global version of Direct
Connect using satellite technology, Donahue said.
Nextel shares gained 52 cents, or 3.8 percent, to close
Tuesday at $14.17 on Nasdaq. Donahue's comments also helped
push up the stock of rival AT&T Wireless. Its shares closed up
2.9 percent, or 19 cents, to $6.83 on the New York Stock
Exchange (News - Websites).
"Certainly there's been some concerns that the economy in
the United States is not particularly strong and that might
hurt the wireless guys. But they seem to be on track," A.G.
Edwards & Sons Inc. analyst Greg Teets said of the stock
movement.
NEW SERVICES
Reston, Virginia-based Nextel also told investors at the
Lehman Brothers wireless conference that the company planned
other new services, such as a Web-based directory and
"push-to-view," which would allow users to pull up information
at the touch of a button.
Donahue said Nextel was also about to announce a wireless
imaging feature that would allow police to pull up mug shots on
their device screens.
The company later this month will introduce a bar code
scanner attachment for business customers who want real-time
access to inventory, he said. The attachment, developed with
Motorola Inc. (NYSE:MOT - News) and Symbol Technologies Inc. (NYSE:SBL - News),
will sell for about $250.
While some analysts have pointed to the lack of new devices
from Motorola, the exclusive manufacturer of Nextel phones,
Donahue said it plans to introduce a new handset each month for
six months, starting in August.
The company in June plans to offer new software for
Research In Motion's (Toronto:RIM.TO - News) Blackberry device, which will
allow users to view attachments.
-- Additional reporting by Siobhan Kennedy in New York

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