Radioshack to ditch Verizon for Cingular.

[lildrummerboy]

The RadioShack Corporation Selects Cingular Wireless and Sprint PCS
as Long-Term Wireless Partners
Agreements Strengthen RadioShack's Position in Wireless Industry

Fort Worth, Texas – July 31, 2005 – RadioShack Corporation (NYSE: RSH) today announced that it has entered into 10-year and 11-year agreements, respectively, with Cingular Wireless and Sprint PCS to be the company's long-term wireless providers in RadioShack stores nationwide. Cingular and Sprint have also committed to support RadioShack Corporation's strategy of expanding retail distribution outside of the core RadioShack stores.

RadioShack's new agreement terms with Cingular and Sprint are projected to be more financially favorable over the life of the agreements relative to the financial model under which RadioShack operates today. The new agreements are expected to provide RadioShack with more profits in the short- and long-term and significant future growth opportunities due to entrance into the GSM market, addition of Nextel products and services (pending their merger with Sprint), and opportunities for expanded distribution.

"First and foremost, our negotiations were focused on improving the economics of the RadioShack-store wireless business and on assuming a more significant role in the carriers' overall distribution strategy. We believe these new agreements will help RadioShack secure a larger share of the increasing value of the wireless industry," said David Edmondson, president and chief executive officer of RadioShack.

The Cingular agreement gives RadioShack an entrée into the GSM protocol, the global standard in wireless phones. The Sprint agreement gives the company continuity with a CDMA protocol provider, building upon the 10-year relationship RadioShack has had with Sprint, along with the introduction of IDEN technology through Nextel.

"After assessing the market place, the technology roadmaps of each carrier, and each carrier's value proposition as it relates to our customer base, we decided it was imperative to introduce a GSM carrier to remain competitive," said Edmondson. "Cingular was our GSM choice as they are the largest wireless carrier in the U.S. This, coupled with the new customers that the Sprint/Nextel merger is expected to bring us, helped guide our wireless partner selection."
Beginning this fall, RadioShack will offer Nextel products and services pending regulatory approval of its merger with Sprint. Cingular products and services will become available in January 2006. After enjoying the benefits of more than five years of selling Verizon Wireless products and services, RadioShack will discontinue selling Verizon Wireless at the end of 2005.

Transitions of this magnitude involve uncertainties. But a variety of initiatives are in place for the remainder of the year that are estimated to offset the costs of the transition. As a result, RadioShack reiterates its 2005 earnings per share guidance of $1.80 to $1.90.

Conference Call and Webcast
RadioShack will conduct a conference call to discuss the announcement Monday, August 1, 2005 at 1:00 p.m. ET. The dial-in number will be 312-461-0745, and there is no password. The public is also invited to listen to the call live on the Internet at www.radioshackcorporation.com on the Investor Relations page. The conference call will be replayed via phone through August 3, by dialing 402-220-2306, password 7282295. The conference call will be replayed via webcast until September 30.

Statements made in this news release which are forward-looking involve risks and uncertainties and are indicated by words such as "expected" and other similar words or phrases. These uncertainties include, but are not limited to, economic conditions, product demand, competitive products and pricing, availability of products, the regulatory environment and other risks indicated in filings with the S.E.C. such as RadioShack's most recent Forms 10-K and 10-Q.

About RadioShack
Fort Worth, Texas-based RadioShack Corporation (NYSE: RSH) is the most trusted consumer electronics specialty retailer in the U.S. and is a growing provider of a variety of retail support services. The company operates through a vast network of sales channels, including: nearly 7,000 company and dealer stores; over 100 RadioShack locations in Mexico; and more than 600 wireless kiosks. RadioShack's knowledgeable and helpful sales associates deliver convenient product and service solutions within an estimated five minutes of where 94 percent of all Americans either live or work. For more information on RadioShack Corporation, visit www.RadioShackCorporation.com. To learn more about RadioShack products and services or to purchase items online, visit www.RadioShack.com.

[Tullphan]

That's all fine & dandy, but what happens to the people in the rural areas that Cingular & Sprint can't/won't cover?

[Critic]

Originally Posted by Tullphan

That's all fine & dandy, but what happens to the people in the rural areas that Cingular & Sprint can't/won't cover?

That's a valid point. If the appeal of RS as reseller is that they're in a lot of places the corporate and big boxes aren't, then what about those RS stores in the middle of nowhere, who aren't in a area with coverage from either Sprint or Cingular? Do they still get to sell the service, even though it won't work (or they're in a non-native area)?

[Fathead]

Most corporate owned RS are in a Cing or Sprint market. The few that aren't get local dealer contracts with whoever does serve the market.


Franchise stores can sell whatever they want, an example is the Blackfoot, ID radioshack, which sells Edge Wireless. The Pocatello, ID radioshack, which is a corporate store, sells Verizon/Sprint. Who knows what they'll do since Cingular does not exist here.

[Tullphan]

Exactly.
The Harrisburg, IL store is a corporate store. Cingular isn't available in that area, but is available in Marion, IL which is about 25 miles SW.
I talked to a Cingular rep in Marion asking about service in Harrisburg. While he wouldn't get into detail, he said something about the "bigwigs" trying to work out something with First Cellular, which is Verizons competitor in Southern IL.
There used to be a very few AT&T providers, but the service was spotty. Right now, it's either VZW or First Cellular if one lives in Southern IL.

[Jerro]

Why buy a phone at any reseller when going direct to Verizon makes warranty service a walk in and walk out situation. Rather than having your phone mailed away for service.

[RJB]

Well I guess if Radio Shack thinks that will be better more power to them

[SQFreak]

Yeah. I think it'll be better for VZW! I went into an RS in Mooresville, NC to ask about EV-DO deployment (my phone was showing EV-DO coverage, but I wasn't aware of a launch imminent). The rep said, "EV what?" I said, "Verizon calls it BroadbandAccess or VCAST." He answered, "You must mean Get It Now."

I gave up. I've found this to be typical of RS employees (no offence to anyone who happens to be one - I have also found exceptions and found great, knowledgable RS employees). I wouldn't want an idiot like that representing my company. I can't imagine RS produces that much in sales for VZW. They push Sprint a whole lot harder than VZW here. So why has VZW kept them around for so long. Just as well they're dropping them, I think.