Annual Meeting Notes, Part 3
International:
Nextel's presence covers 633 Million potential customers (POPs)
Prorated POPs for foreign partial ownership lowers the total to 430 Million
Nextel sees emerging markets as greatest opportunity
Nextel is / will be in 12 of the world's 25 largest cities
Brazil, Sao Paolo to open tomorrow (15 May 98), pent up demand.
Nextel is the only clear competition to Telebras
Mexico City will be launched this summer
Argentina will launch in June
Peru (Lima) will launch late 98, early 99
Phillipines will launch this summer
[After the meeting, I spoke to Keith Grinstein, CEO Nextel International. I was curious about the low per capita income for most of the countries and how Nextel can expect to make anywhere near the ARPU that they do in the US. Using Brazil as an example (and in US $), he said they expect as much or higher ARPU than the US. This is due to the economic stratification. The money is concentrated in the cities, which is where Nextel is deploying. It will be interesting over the next few quarters to see how this pans out].
Domestic: Operating cash flow positive expected late this year
AT&T can claim to be the "largest national network" only because they are talking about analog and digital combined. Akerson calls AT&T a "tangential competitor" because Nextel users want the Direct Connect feature.
Capacity utilization and quality of service are being constantly monitored. Nextel is aware of problems and working to resolve them. Sometimes it takes several weeks to a month or more.
Resell program: nothing going to happen soon. Nextel wants to service its own customers well first.
Nextel national marketing plan: Nextel does NOT want to offer a single rate for all cities. It has been looked at carefully, but doesn't make a lot of sense due to the large spread of rates and costs in various cities.
No intention to sell.
A side comment Akerson made: $50-60 / share would be a reasonable offer now, but not next year
Nextel's national footprint is better than AT&T (digital?) and Sprint. The real kicker, though, is Canada and Mexico which add a unique opportunity.
New York City radio quality:
New York Nextel traffic has grown tremendously
in February 98, New York crossed $100 / month revenue.
A second switch will be added within a month. The process of splitting and retuning cells takes time.
Capital costs, rising interest rates: to avoid possible problem of rising interest rates, Nextel in Q198 raised $3 B and expanded credit line by $3 B (under the impression, then, that it is at fixed rate). More money won't be needed until late 1999, if at all. |
