From the Merrill Lynch report of 3/13/98: "We've heard people say that NXTL's had such great growth because it got the low hanging fruit. Then, we heard people say that NXTL was having to climb higher up the tree to get the fruit. And, then we heard that NXTL was having to shake that tree harder to get the fruit.
Now, what do we think? Maybe the tree is bigger. In fact, with international, maybe there are multiple trees. We think that several things have changed. As we move through this year, we think that investor focus will shift through several different areas, with international becoming a more and more important part of the Nextel story.
We think that 1Q 98 subs will be in-line with our estimate of 360,000. Management indicated that it expects subscriber growth to grow sequentially each quarter. We think management has this view for a few reasons.
First, the first quarter saw the launch of the new handset (the i600), more selling days than 4Q 97, and some fairly aggressive pricing promotions in several major markets.
Second, NXTL plans to launch several cities during 2Q 98 (we counted nine). In addition, second quarter tends to be stronger quarter for the company.
Third, NXTL anticipates getting commercial quantities of its new StarTAC-type handset during the summer (which is earlier than we'd estimated). Even if this slips into the fall, we think that it could have a positive impact on adds as we head into the end of the year.
We think that the near term upside in the Nextel story will come from international. Nextel didn't pay a lot for its international assets. In fact, NXTL's total cost is about $4 per pop."
There is more, but I'm out of time (the report is 4 pages long).
Editor Bill |
