Did they reveal anything about EPS projections? Some other analysts have projected about .60 cents for '03 and about $1 for '04.
Not that I can remember....
Nextel's business plan of offering a differentiated service for high quality customers appears to be working.
Any thoughts on PCS?
Well....I have always thought that Nextel's future depends on how hard it is to implement PTT and how popular data services become over the next couple of years.
Qualcomm also mentioned the difficulty of PTT during a presentation recently.
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Of course, PCS continues to maintain that they will have a working system early next year. I think they are working with Winphoria but still havent seen any details. I would expect that they would need to trial the system before a nationwide implementation so Nextel should have plenty of warning. Without more details, the likelihood of PTT is almost impossible to handicap.
I think the near-term danger for Nextel will probably lie in data services. Most of Nextel's customers are business users who seem likely to also want laptop access. I know that Nextel is offering a flat-rate package for somewhere around $50....but I wonder if business users are going to want to settle for 15-20Kbps throughput. PCS and Verizon are both getting 3-4x this number....of course, they are charging twice as much for that access. I think white collar travelers are going to be pretty tempted by the higher speed data services.
Of course, if they manage to make a $1 in '04, I would think that they have quite a bit of upside. Outside these two pretty obvious dangers, Nextel should profit from keeping churn low and continuing to reduce handset costs.
Another source of upside would be if the FCC were to grant their spectrum swap....though personally, I think the FCC would be INSANE to do so. If this were to happen, Nextel would definitely be in play....they would probably get a decent merger premium built into the stock price.
As for PCS, they clearly tried and failed in their effort to grab people who still dont have a wireless phone. It will probably take a couple of quarters to work through their issues with churn. I sort of wonder if fraud was also involved....they are going to see a huge jump in churn in just one quarter, even though they have been signing up ClearPay customers for over a year. PCS Vision seems to be doing ok. It will probably help ARPU, but I dont think that they have any offerings that are going to grab a ton of marketshare.
PCS is going to need to need a cash-flow positive quarter to act as a catalyst for the stock (just as Nextel did).
Have you seen anything about any new Nextel handsets? I could see a handset with an integrated camera doing pretty well for a segment of their business users.
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