Nextel's 5Q98E, from "Telecom/Wireless SVC: Strong Seasonal Growth", Merrill Lynch report of 1/07:
We establish that Nextel Communications will add over 350,000 net domestic digital subscribers during 4Q98E for an ending base of 2.77 million, up 118% over 4Q97. The company indicated that it is comfortable with a range of 350,000 to 375,000 net additions during 4Q. We believe that Nextel could surpass our net addition estimate.
Nextel added 375,000 net digital subscribers during 3Q98.
We believe that about one-third of the gross additions have chosen the new i1000 handsets. With the introduction of this new, smaller phone, we believe Nextel has been able to reach more white-collar workers.
We estimate that monthly ARPUS during 4Q98E will remain above $69 and that the monthly churn rate will be about 1.8%, comparable with the 1.8% during 3Q98.
We estimate that this will be the second Q that Nextel will generate positive EBITDA for its domestic operations. Our estimate for 4Q98E domestic EBITDA is $56 million. Our estimate for consolidated EBITDA during 4Q98E is $4 million. Our 4Q98E losses per share is $1.47.
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