Interesting concluding paragraph on the Reuters nxtl article:
dailynews.yahoo.com
Nextel Communications Unveils Network Upgrade Plans
WASHINGTON (Reuters) - Nextel Communications Inc. (Nasdaq:NXTL - news), the No. 5 U.S. wireless carrier, said on Thursday it will upgrade its existing mobile communications network to double voice capacity in 2003, leading the
company's shares to jump as much as 29 percent.
In a cost-saving move, the Reston, Virginia-based company said it would enhance its iDEN network in conjunction with Motorola Inc. (NYSE:MOT - news), which makes the Nextel mobile telephones that combine Internet access, text pager and two-way radio that allows users push-button instant communications with others.
``Based upon continued research and development with Motorola, Nextel will be able to make significant enhancements to the capability of the iDEN network, which we expect will double our voice capacity,'' said Tim Donahue, president and chief executive of Nextel.
Shares of the company earlier shot up as much as 29 percent, but recently leveled off at $9.17, up 24.6 percent, in early afternoon trading on Nasdaq. Its 52-week range has been a high of $46.75 and a low of $6.87.
Some analysts said the so-called iDEN technology upgrade will prevent Nextel from keeping up with its competitors as well as require new handsets and an infrastructure upgrade.
ABN Amro wireless analyst Kevin Roe said the announcement does not resolve the company's underlying operating difficulties which include a lack of spectrum, rising capital expenditures, fewer net new subscribers and high acquisition costs.
``Balance sheet risks and an international funding liability also remain,'' he said in a research note. Roe has a ``hold'' rating on Nextel shares which he said is being maintained.
Merrill Lynch revised its estimates for capital spending by Nextel to $2.5 billion for 2002 down from its previous estimate of $3.3 billion. The brokerage firm estimates the company will spend about $2.5 billion this year.
Both firms said this decision was a move against switching to another wireless communications technology manufactured by Qualcomm Inc. (Nasdaq:QCOM - news), known as CDMA (news - web sites) 1X.
``We believe that for the intermediate term, this decision is compatible with a cash conservation strategy,'' Merrill Lynch said.
Qualcomm's CDMA, or code division multiple access, technology is the dominant standard in the United States and competes globally with several other standards, including GSM, or global system for mobile communications, which is dominant in Europe and Asia.
Huh?
uf |
