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Technology Stocks : Qualcomm Moderated Thread - please read rules before posting -- Ignore unavailable to you. Want to Upgrade?

To: foundation who wrote (31191)	1/14/2003 1:50:39 PM
From: foundation	Read Replies (1) \| Respond to of 197154

Wireless Cariers Expecting Mixed Bag From Holidays Lynnette Luna Telephony, Jan 13, 2003 Wireless retailers are offering contrasting accounts of their wireless sales results from the holiday season, but analysts are predicting strong fourth quarter sales for the majority of operators. Retailers RadioShack and Circuit City both said last week that sales were down during the holidays, and wireless was partly at fault. RadioShack blamed Sprint PCS, along with weak sales of radio- controlled toys and DVD accessories, for its reduced fourth quarter earnings per share. RadioShack is an important indicator for Sprint PCS's fourth quarter subscriber additions because analysts estimate the retailer accounts for about 25% of the carrier's activations. Circuit City also blamed slow December sales on the wireless and satellite industries. However, rivals Best Buy and Wireless Retail reported strong sales. Wireless Retail, which reported a 44% increase in 2002 revenues, said its results counter analysts' forecasts of a slowdown in the sales of wireless phones and service plans. Indeed, analyst firm Legg Mason said in a note to investors last week that net additions will continue slowing throughout the year, and lowered its expectations for AT&T Wireless. THE SKINNY ON SUBSCRIBER NUMBERS Company 3Q net adds (loss) Comments Verizon 803,000 Will get majority of all net adds, according to Legg Mason Cingular (107,000) Pricing plans confusing customers Sprint 78,000 Could be hurt by RadioShack sales but helped by resolution of Clear Pay issue AT&T Wireless 201,000 Should meet low end of expectations but will be hurt by slow uptake of GSM phones T-Mobile 896,400 Could be aided by aggressive marketing campaign Nextel 480,000 Expected to see decline of ARPU but meet high end of expectations Verizon Communications, however, refuted slowdown claims. Larry Babbio, vice chairman of Verizon, told attendees at last week's Salomon Smith Barney conference in LaQuinta, Calif., that the wireless division added more customers during the fourth quarter than the 803,000 net customer additions reported in the third quarter of 2002. "We did not see a slowdown in the fourth quarter," Babbio said. "Any indication of softness might be unique [to other carriers]." Timothy O'Neil, founder of independent Wall Street research firm The EON Group, called the fourth quarter one of the most aggressive in the wireless industry's history, characterized by competitive handset rebates and aggressive pricing plans. "There was heavy discounting of high-end handsets and substantial financial support from the vendor community," O'Neil said. "Vendors are still jockeying for position as far as market share is concerned, and they need carriers to place orders so they can continually upgrade their product lines to stay competitive." Analysts expect net additions to fall in roughly the same order as the third quarter, which was led by Verizon Wireless and T-Mobile. Sprint PCS and Cingular Wireless could once again report negative net additions. "My theory is that people who have had the same message in the channel since the third quarter are the ones with the good numbers," said Ned Zachar, wireless analyst with Thomas Weisel. Sprint PCS reported a net loss of 78,000 customers in the third quarter because of high churn related to the company's Clear Pay program, which targeted credit-challenged customers. Following RadioShack's admission of diminished sales, Sprint PCS's ability to meet its fourth quarter guidance may be more difficult. The company has said it expects to report a net gain of customers, but those numbers depended on how many new customers signed up in the final weeks of December. Cingular, which reported a net loss of 107,000 customers in the third quarter, suffered because of its experimental pricing plans, which tended to confuse consumers, analysts said. currentissue.telephonyonline.com