Subject: [NEXTEL-1] Goldman On Verizon vs NXTL Lawsuit Highlights-Stock rating: Underperform

From: [email-masked]
Date: Tue, 01 Jul 2003 09:02:16 -0400

Analyst Comment
June 30, 2003

Nextel Communications (NXTL)
Stock rating: Underperform

Price: US$18.49

Verizon vs NXTL Lawsuit Highlights
Increasing Competitive Pressures in Wireless Nextel Communications

It is reported today in The Wall Street Journal that VZ has filed a lawsuit
against NXTL for, among other things, improperly obtaining prototypes of a new VZ handset and
gaining unauthorized access to the VZW network to test the device. We have no
comment on the veracity of the lawsuit, but highlight that, in our view, this is further
indication of the high competitive intensity in the US wireless market. The stakes are high for
both parties regarding PTT. NXTL has had great success competing essentially as a PTT
monopolist and VZ has made bold claims of new growth opportunities from launching
its own PTT product. We think a VZ PTT product is imminent, and that PTT offerings
from PCS and AWE will be available in 2H03 or 1H04. Even if not perfect comps for
NXTL's product, competing PTT products will hurt NXTL's top line growth and margins as it
faces new competitive pressures for the first time. The added risk and uncertainty
of this lawsuit makes us reiterate our Underperform/Neutral rating on NXTL shares.

See Attachment:

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