Arnie,
McCaw has invested in several high-risk ventures and he can afford to lose it all. Can you?
Nextel generates sizeable investment banking revenues, so don't expect any downgrades until after the stock tanks.
Nextel is an SMR company and ought to be valued primarily on the basis of its SMR (aka "direct connect") revenues. Nextel's voice/paging offerings are not competitive with those of "commodity PCS providers", will not be a significant contributing factor in the future and therefore ought to be considered a one-time gain
Besides, Nextel's nationwide footprint appears to be too narrow to support a cellphone network. iDEN requires 25Khz per channel. Two channels are needed to facilitate full-duplex traffic. 15MHz that NXTL purports to own in major markets can support 3,000 simultaneous phone conversations TOPS. That is, per cell tower. If one to take the Bubba's number of 7,000sq miles/tower at face value (I don't, but that's the best I have), at any given time iDEN can support, on average, up to two cellphone calls per square mile. Assuming no "direct connect" activity, that is.
As Bell Atlantic likes to put it, a cellphone is only as good as the network it is on. Nextel's look cheesy to me.
PTB |
