Wireless stocks surge on mobile phone demand
CHICAGO, Sept 19 (Reuters) - Shares of wireless telephone companies rose on Wednesday as investors bet on surging mobile telephone sales following last week's attacks by hijacked airplanes on the World Trade Center and the Pentagon that have left nearly 6,000 people dead or missing, analysts said.
Despite a lower broad market, shares of such wireless companies Verizon Communications <VZ.N>, AT&T Wireless Services Inc. <AWE.N>, Sprint PCS Group <PCS.N> and Nextel Communications Inc. <NXTL.O> were all up 3 percent to 6 percent in morning trading, as were shares in the world's largest mobile phone maker, Finland's Nokia <NOK1V.HE> <NOK.N>.
The Philadelphia Stock Exchange's wireless telecommunications index <.YLS> was up 1.27 percent to 81.20.
"Wireless companies and their vendors are saying that people are rushing out and buying cell phones after this tragedy," Guzman & Co. analyst Patrick Comack said. "People want to have a cell phone at all times in case of emergency now. I have to revisit my penetration estimates."
Wireless phone shipments by manufacturers have plunged this year as the economy has slowed. Last fall mobile phone makers were predicting shipments would top 600 million this year, but that figure has steadily dropped and had recently been expected to finish flat with last year's 410 million.
Nextel spokeswoman Audrey Schaefer said it was too early to tell whether sales were getting a boost after last week's tragedy, but evidence suggests there is a new appreciation for mobile phones.
"We're getting anecdotal information -- people that are sending us e-mails about how they used the service, how it made such a difference to them to be able to contact loved ones," she said.
Media reported on several cases in which individuals in the World Trade Center's towers or on the doomed planes called loves ones, analysts said.
Tim Ghriskey, senior partner at Ghriskey Capital Partners LLC, a Greenwich, Connecticut-based investment management firm, said consumers realize even more that mobile phones afford a measure of safety.
"Any stock up here is directly tied to last week's tragedy," he said.
Ghriskey added the share price increases are also linked to a belief that redundancies are needed in the mobile-phone infrastructure.
Comack said he previously thought mobile-phone sales would top out at a penetration rate of half of the U.S. population, below the industry's projected rate of 70 percent.
"To get to 70 percent penetration, you'd have to have little kids and grandma and grandpa carrying cell phones, and I didn't think that was going to happen," he said. "Now, I'm thinking maybe it will. Maybe everybody will be packing a cell phone at least just for emergencies."
Comack said mobile phone vendors sold a month's worth of phones last week.
Jon, you have the floor.....Coot
13:19 09-19-01 |
