Subject: [NEXTEL-1] Boost Mobile: Hip Cell-Phone Company Plans to Expand

From: [email-masked]
Date: Sun, 19 Oct 2003 16:58:43 -0400

Hip Cell-Phone Company Plans to Expand from Test Market in 
California, Nevada

October 18, 2003 3:18am

Oct. 18--IRVINE, Calif.--On most days the offices of Boost Mobile 
are crowded with frenzied workers dressed in jeans, shorts, T-shirts 
and baseball caps. It's the kind of place where you might feel 
overdressed if you showed up in chinos.

But on Friday, the company's headquarters was quiet, because all the 
staff were at Six Flags Magic Mountain celebrating. Here's why: The 
company's majority owner, Nextel Communications, has agreed to 
expand Boost's test market, which has been restricted to California 
and Nevada.

Boost, which started with two employees about 18 months ago, is 
getting ready to go on a hiring binge. The company expects to more 
than double its staff of 60 by the end of March.

Boost recently signed up its 250,000th prepaid cell-phone customer. 
Its customer base has more than quadrupled over the past six months.

"I'm pretty proud of the results this team has shown," said Peter 
Adderton, the company's founder and chief executive.

Boost Mobile markets itself as a hip "lifestyle" brand. It uses 
surfers, skateboarders and other extreme-sports athletes to sell 
space over the Nextel network.

Nextel is eager to add young customers -- the fastest-growing part 
of the wireless market -- because its network is mostly used by 
businesses and government agencies that it has historically targeted 
with its marketing.

Still, Boost is playing catchup with Virgin Mobile, another prepaid-
wireless provider, which launched its service in August 2002, 
several months ahead of Boost.

As of the end of January, Virgin had 350,000 U.S. customers. It uses 
the Sprint PCS network.

Nextel Chief Operating Officer Thomas Kelly said Thursday that while 
his company is pleased with Boost's results to date, it's still 
tweaking the business model.

For example, Boost and Nextel are looking at changing the way they 
keep track of prepaid minutes. Instead of storing financial 
information on a central computer system that's accessed each time a 
call is made, the companies will soon test a system that stores that 
data on a memory card in each telephone.

That could cut the cost of accounting for prepaid minutes, Adderton 
said.

Boost is also preparing to unveil a new line of less-expensive 
telephones.

To date, Boost has sold slightly modified versions of Nextel phones. 
They have mostly been high-end handsets with features designed for 
business customers that the typical Boost customer doesn't use, said 
Adderton.

Boost Mobile's phones are fashionable-looking and have a walkie-
talkie feature, text-messaging, cool ring tones and downloadable 
games. Like other prepaid-cellular services, customers pay in 
advance rather than via a fixed monthly fee.

While Boost and Nextel have yet to finalize their expansion plans, 
Adderton said they're eyeing New York, Florida, and Chicago.

Those are areas with plenty of teenagers and twenty-somethings, the 
group that Boost is targeting.

Nextel and Boost say they're slowly expanding the new product as 
they learn how best to run the business.

"There are a lot of lessons that we have learned that would have 
been very, very expensive lessons if we had been nationwide," 
Adderton said.

"Taking the the slow approach has been fiscally responsible."

http://www.hoovers.com/free/news/detail.xhtml?ArticleID=NR200310181180.3_2021000f09b36508

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