DCR Issues Credit Analysis Report on Nextel Communications
Thursday February 5, 3:16 pm Eastern Time
Company Press Release
SOURCE: Duff & Phelps Credit Rating Co.
CHICAGO, Feb. 5 /PRNewswire/ -- Despite sector-wide pressures related to competition and service, Nextel Communications is strongly positioned in the wireless communications industry with good prospects for future growth, according to a new report on the company from Duff & Phelps Credit Rating Co. (DCR).
''Underlying Nextel's and most other U.S. wireless companies' credit profiles is our expectation that wireless penetration and usage will climb dramatically in the foreseeable future and will be supported by lower prices, new applications and, potentially, certain structural changes in the pricing and cost of these services,'' noted Michael P. Coutre, DCR vice president.
DCR rates Nextel's senior discount notes 'B' (Single-B) and its preferred stock 'CCC' (Triple-C). The rating recognized the significant improvements the company has made to its reconfigured digital wireless technology (iDEN), its assembly of a nationwide footprint, the relatively low current and anticipated debt/covered pop measures and the growing equity commitment from strategic investor Craig McCaw, the DCR report explains.
''The rating also incorporates the risk (and potential rewards) associated with Nextel's differentiated marketing strategy, its single-vendor-supported and immature technology platform and intensifying competition in the wireless industry,'' Coutre explained.
Nextel is among the largest wireless carriers in the United States, with nearly 1.3 million digital subscribers and specialized mobile radio licenses covering 250 million pops. ''Assuming Nextel continues to successfully penetrate the market, DCR expects it to be among the first, if not the first, of the wireless start-ups to produce positive EBITDA,'' Coutre said.
To date, the company has ''more than delivered on its business plan, and our outlook for credit improvement remains strong relative to its PCS peer group,'' he concluded.
For a copy of DCR's report on Nextel, contact the DCR Hotline at 312-368-3198 or hotline@dcrco.com.
SOURCE: Duff & Phelps Credit Rating Co. |
