Nextel CEO upbeat about growth prospects
Tuesday October 8, 5:37 am ET
biz.yahoo.com
SEVILLE, Spain, Oct 8 (Reuters) - U.S. wireless telecoms carrier Nextel said on Tuesday it was very upbeat about its growth opportunities, as it called for industry consolidation in which it did not expect to take part immediately.
Nextel, the number five wireless carrier in the U.S., is generating $71 of average revenue per user (ARPU) per month, and Chief Executive Tim Donahue told a technology conference here he expected to maintain that level over the next few years as mobile phone usage increased.
"We're generating 685 minutes (of voice calls) per customer per customer per month. Our models suggest that it can go up to as high as 900 minutes over the next three years," Donahue said.
About its growth prospects in the competitive U.S. wireless industry he said: "I don't see anything external that's going to slow us down."
Donahue, speaking at the annual ETRE conference, said voice communications remained the key driver behind his business, although data communications would grow to generate 10 percent of revenues over time.
He was sceptical about fast wireless networks currently being pioneered in Japan, South Korea and Europe.
"If you ask me will we ever build a broadband (wireless) network, I'd say yes. But I don't know when," he said.
The selling prices of the CDMA 1x wireless networks it was interested in, sold by U.S.-based Lucent (NYSE:LU - News), Motorola (NYSE:MOT - News) and Sweden's Ericsson (Stockholm:ERICb.ST - News) and others, had already fallen by 40 percent over recent months, he said. That showed it was worth waiting.
About the crowded U.S. wireless industry, where six companies compete for customers, he said consolidation was needed.
"Over time you look at three or four players, rather than six. I don't think Nextel will be involved in the first round of acquisitions, and if we will be involved over time it will be as an acquirer, not the one who may be acquired," he said.
Nextel is showing above average revenues per user, partly as a result of a walkie-talkie function it has developed with Motorola and which is integrated in a cellphone, and is currently taking debt off its balance sheet.
Donahue reiterated he expects $3 billion of positive earnings before interests, tax, amortisation and depreciation in 2002. |
