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Technology Stocks : Sprint Nextel Corporation (S) -- Ignore unavailable to you. Want to Upgrade?

To: slacker711 who wrote (843)	1/9/2003 1:48:17 PM
From: Cooters	Respond to of 1691

Some comments on PCS, via Yahoo PCS board. I cannot verify source. ----- "Friedman, Billings, Ramsey & Co., Inc. - Part 2 (PCS, AWE, NXTL) 9 Jan 2003, 07:31am ET - - - - - Wireless Services 4Q02 Preview 4Q all about 3G demand, not new subscriber growth. During the 4Q earnings season, we believe investors should focus more on consumer demand for 3G services rather than actual net new subscribers. Sprint PCS should be the best leading indicator for consumer demand, and Nextel should lead in the enterprise market. The good news. Churn will show improvement for most wireless carriers, particularly those hardest hit by the Worldcom collapse in the prior quarter. The not-so-good news. Subscriber growth remains positive but at a declining rate. Initial indications from major electronic retailers such as Circuit City, BestBuy, and RadioShack regarding 4Q wireless sales are mixed. In addition, aggressive promotional pricing plans should negatively impact ARPU. 2003 outlook cautiously optimistic. In particular, we believe that consumer demand for data may surprise investors on the upside; however, pricing (for voice and data) must remain stable for investors to benefit. Valuations bounced back in anticipation of a "no surprises" quarter. The wireless stocks were strong during the 4Q as AWE increased 37%, NXTL 53%, and PCS 123%. Wireless stocks currently trade at 7.1x our 2003 EV/EBITDA estimates, which we believe is fairly valued. Our ratings on AWE, NXTL, and PCS remain at Market Perform; however, we have a positive bias towards PCS. PCS: reit` market perform - We are cautiously optimistic that 4Q results will confirm that 3Q was the "low water mark." In particular, we expect net adds to be positive (albeit only 180,000) and churn to improve sequentially from 3.8% in 3Q to 3.5% or better in 4Q. In addition, we believe investors should focus on Sprint`s launch of 3G 1xRTT and the recent consumer demand (uptake) of 3G handsets and service. Despite limited handset availability, at the end of September consumer uptake (percentage of gross adds signing up for data service) was around 10%, which subsequently increased to the high teens by early December. AWE: reit` market perform - Our expectations for AT&T are high, particularly as we expect the company to gain a significant number of new subscribers in 4Q due to the nationwide availability of its GSM network and its aggressive offering of "unlimited anytime" pricing plans. However, our longer-term concern for managing two networks (TDMA and GSM) and the incremental capex requirements for additional GSM capacity result in our Market Perform rating. AT&T Wireless is scheduled to release 4Q results on the morning of January 28, just prior to their analyst meeting in New York. NXTL: reit` market perform - Our expectations for NXTL in 4Q are "more of the same." Operating results should be stable, including net adds, churn, and CPGA, as the company has the strongest subscriber base in the industry. But regardless of the results, we believe that in 2003, investors will begin to trade Nextel as a takeover candidate. We believe that Nextel`s proposal at the FCC to reconfigure the 800 MHz Public Safety spectrum (which we expect will be approved in 2Q03-see our brief from December 30, 2002) is one of the two major catalysts for a takeover."