SMARTMONEY - Tireless Wireless
by: ridelongride 10/04/01 04:50 pm
Msg: 306074 of 306082
Wednesday October 3, 5:45 pm Eastern Time
SmartMoney.com - Sector Patrol
Is Wireless Demand Tireless?
By Roben Farzad
CELL PHONES, CONSIDERED a luxury a decade ago, have become part of everyday life for millions of Americans. And after the tragedy of Sept. 11, millions more may sidle up to the realization that, during an emergency, instant communication with loved ones is essential.
Perhaps that explains why most of the wireless sector's usual suspects have outperformed the market since the attacks. Handset leader Nokia (NYSE:NOK - news), for instance, has added 15% since its Sept. 10 close, while pure-play service providers Sprint PCS (NYSE:PCS - news) and AT&T Wireless (NYSE:AWE - news) have surged 18% and 9%, respectively. Even Motorola (NYSE:MOT - news), which has seen its share price cut in half in the past year, has held its ground, gaining 2% during the period. The numbers are even more impressive when you compare them to the 7% drop posted by the Nasdaq and the 2% decline in the Standard & Poor's 500 since Sept. 10.
But does this resiliency since the tragedy represent a fundamental shift in the fortunes of the beleaguered wireless sector? Let's not get ahead of ourselves.
On the bright side, all signs point to a spike in demand over the past month. We did a spot check of some wireless providers in the New York metropolitan area and beyond, and they all reported sharply higher sales. Research by Pacific Crest Securities, meanwhile, shows that corporate-account sales at Sprint PCS are markedly higher than their preattack levels. ``I think this will be a net positive for the entire year,'' predicts analyst Simon Reeves. Other positives in Sprintland: 51% year-over-year subscriber growth, and an all-time low churn rate (that is, customers signing up for service, then bolting to another carrier), thanks to the popularity of the company's long-term contracts.
Similarly, AT&T Wireless, now completely severed from the house of confusion that is AT&T (NYSE:T - news), is sticking to its full-year goal of 2.9 million subscriber additions — with many analysts thinking it will surpass that number thanks to increased traffic in the wake of the attacks. Ditto for wireless sales at Verizon Communications (NYSE:VZ - news) and Cingular, a joint venture between regional bell carriers SBC Communications (NYSE:SBC - news) and BellSouth (NYSE:BLS - news) that serves more than 20 million customers...
P.S. Go to SmartMoney for the rest of the story (to me its a waste), basically the analysts are hanging back & not committing (or doubting) any long term trend increase - the question is - what do you think? what does YOUR gut tell you??? i.e. How often lately have the analysts been right.
Ignore this User | Report Abuse |
