Nextel Reports Strong Fourth-Quarter Results

[ComicalMoodyDan]

Nextel Reports Strong Fourth-Quarter Results

Nextel Communications reported fourth quarter net income of $1.46 billion or $1.38 per diluted share, compared with a net loss of $1.8 billion or $2.25 per share for the year earlier period. The company added 503,000 new subscribers during the fourth quarter, exceeding its estimate of 468,000 subscriber additions. Average revenue per user was $69, and its customer turnover, or churn, rate was 2.1 percent. Nextel Communications ended the year with 10.6 million subscribers.

[DandyDon]

2.1% churn is solid. If anyone knows where to find finacials and quarterly reports for Boost Mobile please post. Boost Mobile is out of Australia and is now available here in the U.S., but only in Las Vegas & Los Angeles in a "trial" run. Boost Mobile is a prepaid service that uses Nextel's Iden network, complete with the 2-way, internet, games & ringers, that has the ability to work in all of Nextel's coverage areas across the country. Basically, it is Nextel Pre-Paid but the success and plans for future roll outs will {IMHO} have a lot to do with churn. I can't seem to find any reports on them though.

I would like to see Boost Mobile expand to other markets. It would blow away all other pre-paid services (TracFone #1 now) out of the water. [img]i/expressions/face-icon-small-smile.gif[/img]

It's all about the churn.

[jmccrane]

Nah. First of all TracFone stinks but it is #1 because it has been around longest. Verizon's FreeUP is currently the best prepaid service, and Virgin is respectable as well. Boost would give both some good competition, but would not "blow them away."

Nextel runs low churn because businesses don't like to change phones. Nextel has a solid business model, but it is very limited in the fact that it doesn't appeal to the mass market like the other national providers. For this reason Nextel will never be a top 3 carrier in this country without a merger/acquisition.

I think they need to use the profits they're making to ditch iDen and come up with something better before they turn around and realize that they've really fallen behind the times.

[DandyDon]

I think they are smart for keeping iDen. Most subscribers simply want voice features, and when the new software upgrades to the network are released in the fall they will be able to double capacity. If someone needed hi speed wireless data, Motorola has developed WiDen allowing speeds up to 144Kbps. iDEN is not dead, it's like a nice car that in stead of getting a new one it will get new paint and an engine overhaul. Everone else will be getting new networks that they might not be able to afford.

[roamer1]

Given that Boost itself is not a public company I doubt you'll see any numbers. [img]i/expressions/face-icon-small-sad.gif[/img] That said, Nextel has hinted that Boost is doing well and is likely to expand to other markets.

As for the technology issue, the typical Nextel customer just isn't interested in color phones with dozens of musical ring tones, games (there are some J2ME games for Nextel phones, though), ultra-fast tethered data, etc. -- iDEN serves its core user base well. Despite that, Nextel and Motorola are pushing iDEN to its limits -- but they really have little choice;short of a deal with the FCC to reallocate frequencies in the lower SMR band such that all Nextel's are contiguous or moving to a entirely new bandwidth allocation (e.g., 700 MHz when the digital TV transition is complete), Nextel is stuck with iDEN.

-SC