Ramsey, you ask how competitive NXTL is in certain categories. First, I suggest that one needs perspective before asking/answering those types of questions. When McCaw placed his bet with NXTL, he did so for one very obvious reason: He stated on the public record that he did not want to be in the commodity business as he had already been there, done that, with McCaw Cellular. So he chose NXTL because of its phantom position (i.e. 800 mhz licenses) in the cellular arena and its obvious niche advantage to businesses because of its dispatch biz. The MOT connection didn't hurt either. The genius of his choice can be seen in the $70 ARPU vs. commodity industry averages. How and why can NXTL maintain $70? By offering business customers a better value than their current dispatch/cellular/pager toys give. Believe it or not, businesses save money using NXTL, in spite of higher than industry average ARPUs. The point often missed on this thread is that NXTL's current claim to fame is as a niche player, not as a commodity provider. For NXTL to succeed, they don't need to sign up every Tom, Dick and Harry. So cost is a relative term: Relative to heavy users, that is, not the "Bring home a loaf of bread, dear" crowd. Leave those for Sprint, AT&T and a cast of thousands. Somebody has to buy all those cdma phones. :-) Interesting, isn't it, that no one except me has commented on Moody's (or was it S & P's) statement that NXTL has more phones in use than CDMA or GMS in the U.S. Seems to me that's a pretty telling statement, especially for a niche player. Of all the public info on NXTL in the last month, this is THE MOST IMPORTANT. Why? Because it tells us that NXTL's game plan is working. ADVANTAGE NEXTEL!!!!!!!!!!!! What else do we need to know?
The key questions after cash flow and profitability issues are resolved will address when/if competition will try to horn in on NXTL's direct connect feature. I'm betting that NXTL's competition is so focused on the commodity biz and increasing market share, that they'll put direct connect on the back burner.
Arnie |
