Your alleged advantages CDMA/Sprint maintains over iDEN/Nextel has not shown in Sprint's bottom line, and that's what's important to service providers and ultimately wall street. Nextel will report ~$700 million positive EBITDA this year, while Sprint will not turn cash flow positive until well into next year, even though they consistently add more subs on a quarterly basis. So where's their CDMA advantage?
Your favorable comparison of Nextel's earnings to Sprint's is before INTEREST, taxes, DEPRECIATION, and AMORTIZATION. Unfortunately, these expenses are just as real as any other expense a carrier might face. In fact, it is just these expenses, especially the ones I have capitalized, that concern me most about Nextel. And as their network fills up and more capacity is required, the problem will be worse not better. CDMA carriers will be able to amortize their infrastructure expenses over many more years since CDMA has an easy upgrade path to 3G and iDEN does not.
It's not that I don't think Nextel will ever show earnings, but I think there is a discrepancy between the valuation of Nextel and reality. There are better places to park your investment dollars (less risk, higher potential return). The trend is your friend and the trend is CDMA. You may not see the CDMA advantage accruing to Sprint's bottom line but it is there if you look for it and in 12-24 months it will be obvious for all to see.
Since Nextel is not a stock I am pursuing I do not care to go over a line by line valuation comparison to try to prove our respective points. I am merely trying to shine a light on some problems I see going forward while management seems all too happy to paint a rosy picture and call it good.
Good luck with your Nextel shares, I hope for your sake that I am wrong.
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