Subject: [NEXTEL-1] Can You Fear Me Now?

From: [email-masked]
Date: Tue, 28 Oct 2003 15:03:23 -0500

Can You Fear Me Now?

By Rick Aristotle Munarriz (TMF Edible) October 28, 2003

As investors, aren't we supposed to be rewarded for catching hot trends early?
Apparently not. One of the most frustrating aspects of buying into the wireless
sector is that, while the market has been growing, the same can't be said for its
key players.

AT&T Wireless (NYSE: AWE) shares now fetch a third of what they did three years
ago. Sprint (NYSE: PCS) has fared even worse. Nextel (Nasdaq: NXTL) has held up
better, but it's still down over the same period. This gives disillusioned
investors every right to want to wring the neck of Verizon's (NYSE: VZ) "Can you
hear me now?" guy.

No. The market can't hear you now. Care to speak up, please?
It's a fatal mistake. Guessing right on a trend but poorly on the competitive
state and margin-munching pressures of a growing field will close the book on even
the meatiest story stocks.
It may not get better in the near term. Next month the number portability rule
kicks into effect.  Cellular phone users will be able to switch carriers while
keeping their telephone numbers. That gives customers one less reason not to shop
around, and churn will climb. It will also make the entire sector more susceptible
to price wars, which is already a problem.

So while Verizon Wireless -- a joint venture with Vodafone (NYSE: VOD) -- posted
an 18% jump in revenue on the way to adding 1.3 million new accounts this past
quarter, that doesn't make buying into the parent any less frightening.

And despite growth in long-distance and broadband, Verizon's flagship local
telephone business suffered a 4% dip. If investors are drawn in by the fact that
Verizon trades at just 13 times its own profit guidance for this year, it woudn't
be the first time value hunters shot themselves in their collective feet.
Aim better. Aim somewhere else.

http://www.fool.com/Server/FoolPrint.asp?File=/news/mft/2003/mft03102808.htm

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