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Technology Stocks : NEXTEL
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To: Satellite Mike who wrote (3721)12/16/1997 11:37:00 AM
From: P.T.Burnem  Read Replies (1) of 10227
 

Why wouldn't Nextel be valued as highly as a digital cellular
company when they offer both digital cellular and S.M R.?

Because the primary source of Nextel's revenue is SMR (Direct Connect as well as analog).

Even if they provided radio only, there are millions of people
who can use radio for their businesses. If NXTL offers digital
cellular plus Direct Connect, why should it be valued lower?

I did not say Nextel ought to be valued lower than digital cellular providers, only that they ought not to be compared to each other for valuation purposes.

In fact, one can argue that a dominant SLR provider like Nextel should fetch higher multiples than commodity digital cellular players, and that Nextel's ability to throw in some digital cellular in the mix is a definite plus.

Then there is what I call the "electronic leash" market - allowing parents at work to keep in touch with their teenage kids at home. Nextel, with its Direct Connect technology, is well positioned to grab a share of this potentially huge and lucrative market.

PTB
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