Subject: [NEXTEL-1] Nextel Delays Decision on Irvine, Calif., Prepaid Carrier

From: [email-masked]
Date: Fri, 18 Jul 2003 16:03:04 -0400

Nextel Delays Decision on Irvine, Calif., Prepaid Carrier
July 18, 2003 3:29am
Knight-Ridder / Tribune Business News

Jul. 18--Nextel Communications Inc. has postponed deciding whether to expand its
majority investment in Irvine's Boost Mobile, a company that is test-marketing
Nextel's prepaid wireless services to youth in California and Nevada.
Nextel previously had said it would decide by the middle of this year.

Boost Mobile said Thursday that it signed up 80,000 customers during the second
quarter, more than doubling the number of users to about 140,000.
The company -- which started selling its service in the fourth quarter of last
year and is operating at a loss -- uses surfers, skateboarders and other
extreme-sports athletes to market Boost Mobile as a "lifestyle brand."

Boost Mobile is keeping a higher percentage of its customers than other prepaid
wireless services and the average Boost Mobile user spends "significantly" more a
month than customers of competitors, Nextel Chief Operating Officer Thomas Kelly
said in a Thursday morning conference call.

Still, Kelly said it's too soon to say whether the product can meet Nextel's
requirements for further funding.
The criteria include: Showing that Boost Mobile can sustain charging a higher
per-minute rate than Nextel charges its regular customers.

Showing that it can add customers at a lower cost than Nextel.
Showing that it can provide customer service at a lower cost than Nextel.
Cutting the subsidies it currently pays on each phone it sells.

http://www.hoovers.com/free/news/detail.xhtml?ArticleID=NR200307181180.3_81710004368446e7

http://www.ocregister.com

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