Subject: [NEXTEL-1] Sprint PCS Push-to-Talk

From: [email-masked]
Date: Mon, 04 Aug 2003 07:51:37 -0400

Here's one I missed, But a Nextel-1 reader caught.
Note the Specific info about Sprints product.
======================================================

>From the August 1, 2003 print edition of the The Business Journal of Kansas City

Quiet debut will belie potential of Sprint's walkie-talkie service

Charlie Anderson
Staff Writer

There will be little flash when Sprint PCS rolls out a walkie-talkie service
similar to
competitor Nextel Communications Inc.'s later this year.

But introducing the feature could help the Overland Park-based wireless company
increase
profits, gain higher-paying customers and stem subscriber losses.

"It's going to hit all the key points," said Bill Benton, a New York-based analyst
at
William Blair & Co. LLC who does not own Sprint stock. "It's a very modest
investment for
what could be a very sizable return."

So far, Sprint PCS has been ho-hum on the service, trademarked by Nextel as "push
to
talk." The feature allows users to talk without dialing any numbers, connecting by
the
push of a button.

Upgrading the network for push to talk costs in the "hundreds of millions,"
analysts said.

Off the success of its walkie-talkie service, Nextel has received the type of
investor
confidence its peers long for.

Consider that Nextel, with 11.1 million customers, has $19.7 billion in investor
dollars
in the market. Sprint PCS, with 15 million subscribers (18.2 million if you count
affiliates), has a capitalization of $6 billion.

Nextel grabs more revenue per customer than Sprint PCS ($67 to $59) and has fewer
defections (1.9 percent vs. 3.1 percent). Its profit margin is about twice as
high.
All of which makes the walkie-talkie service a likely candidate for competitors to
copy.
AT&T Wireless Services Inc. and Verizon Wireless also plan to release push to talk
in the
next 12 months.

Although the opportunity to capture Nextel's magic appears ripe, analysts said
service
quality will be poor at the start.
Specifically, Sprint PCS will have trouble avoiding a two-second delay between
messages,
said Tole Hart, an analyst at Gartner Inc., based in Stamford, Conn.

"That's one of the reasons Sprint hasn't rolled it out yet," Hart said. "I don't
think the
service will be good enough to challenge Nextel."

Because of those issues, Sprint PCS is expected to market its service -- branded
as Ready
Link -- to consumers. Nextel has seen success selling to business customers, who
rely on
instant connections.

"The product will be directed at people largely who aren't using the product now,"
said
Ned Zachar, a New York-based analyst at Thomas Weisel Partners LLC. "Over time,
the
product will be competitive."

Zachar, who does not own Sprint stock, said he sees the potential of 10 million
additional
subscribers signing up for push-to-talk services among all the wireless carriers.

In a first-quarter conference call, Sprint PCS President Len Lauer said the
company has a
number of advantages in coming to market: its ability to offer high-speed data
services in
the same phone, a distribution channel of stores and a well-known brand.

Sprint PCS's first Ready Link phone, registered June 23 with the Federal
Communications
Commission, is a ruggedized device similar to those Nextel has sold to
construction crews.

Benton said he doesn't expect Sprint PCS to expend the same effort marketing Ready
Link
that it did a year ago with PCS Vision.

"It's going to be a little more quiet and focused," he said.

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