Max, what Ramsey said. Plus I'll copy an email I recently sent to a colleague who was interested in Nextel:
Re Nextel, I'd stay away from anything that has PCS operator associated with it. The current operators, for the most part, are going to have a hard time earning a return on all that investment on their balance sheets. Nextel acquired licenses by buying out paging and SMIR operators, so got going businesses for their cash vs. the encumbered spectrum bidders got, but they must be incurring lots of unique costs in making the transition to cellular-like service. The infrastructure they had in place didn't buy them a lot. They have a niche, and a nationwide footprint, but they are tied into one vendor (Motorola) with expensive (and clunky) equipment, with a technology (TDMA) that doesn't make best use of the narrow slices of spectrum they have. Their market visibility is limited. They seem to be going for direct marketing into businesses, so they are swimming upstream against the incumbent carriers, counting on churn more than expanding market. On the other hand, I wouldn't count out the management team. The stock has come back quite a bit in recent months, but it's a slugfest in wireless right now. |
