To: Frank A. Coluccio who wrote (3955 ) 9/20/2001 2:07:20 PM From: elmatador Respond to of 46821 Wireless stocks surge on mobile phone demand By Ben Klayman, Reuters 20 September 2001 Shares of wireless telephone companies rose on Wednesday as investors bet on surging mobile telephone sales following last week's terror attacks on the World Trade Center and the Pentagon that have left nearly 6,000 people dead or missing, analysts said. Despite a lower broad market, shares of wireless companies Verizon Communications, AT&T Wireless Services Inc., Sprint PCS Group and Nextel Communications Inc. all closed up 3 percent to 7 percent in Wednesday trading, as were shares in the world's largest mobile phone maker, Finland's Nokia. The Philadelphia Stock Exchange's wireless telecommunications index finished up 2.24 percent at 81.98. "Wireless companies and their vendors are saying that people are rushing out and buying cell phones after this tragedy," Guzman & Co. analyst Patrick Comack said. "People want to have a cell phone at all times in case of emergency now. I have to revisit my penetration estimates." Wireless phone shipments by manufacturers have plunged so far this year as the economy has slowed. Last fall mobile phone makers were predicting shipments would top 600 million this year, but that figure has steadily dropped and had recently been expected to finish flat with last year's 410 million. Nextel spokeswoman Audrey Schaefer said it was too early to tell whether sales were getting a boost after last week's tragedy, but evidence suggests there is a new appreciation for mobile phones. "We're getting anecdotal information - people that are sending us e-mails about how they used the service, how it made such a difference to them to be able to contact loved ones," she said. Clay Owen, a spokesman for Cingular Wireless in Atlanta said the company saw increased sales in certain areas, including Philadelphia and San Diego, but other places were normal. "It is kind of all over the map right now," he said. Verizon Wireless spokesman Jim Gerace said his firm had launched a new nationwide marketing campaign just before the attacks, but the Northeast has seen an increase in mobile phone sales out of proportion with the rest of the country. AT&T Wireless spokeswoman Danielle Perry said there had been an increase in sales nationwide, but said it was not a significant increase. "I would just emphasize it's only been a few days," she said. "It's certainly too early to classify as a trend." Media reported several cases in which individuals in the World Trade Center's towers or on the doomed planes called loves ones, analysts said. Tim Ghriskey, senior partner at Ghriskey Capital Partners LLC, a Greenwich, Connecticut-based investment management firm, said consumers realize even more that mobile phones afford a measure of safety. "Any stock up here is directly tied to last week's tragedy," he said. Ghriskey added the share price increases are also linked to a belief that redundancies are needed in the mobile-phone infrastructure. Comack said he previously thought mobile-phone sales would top out at a penetration rate of half of the U.S. population, below the industry's projected rate of 70 percent. "To get to 70 percent penetration, you'd have to have little kids and grandma and grandpa carrying cell phones, and I didn't think that was going to happen," he said. "Now, I'm thinking maybe it will. Maybe everybody will be packing a cell phone at least just for emergencies." Comack said mobile phone vendors sold a month's worth of phones last week. Credit Suisse First Boston analyst Cynthia Motz said wireless phone companies also saw a surge in minutes billed after last week's attacks. "Everybody wants to be connected," she said. "Who's not going to want a cell phone after this? People are feeling this is a pretty valuable item."