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With The Telecom Industry On Hold, Nextel Sends Out A Different Signal.(A)

Investor's Business Daily

| March 02, 2001 | COPYRIGHT 2001 Investor's Business Daily, Inc. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan.  All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)Copyright

By Robin Grugal

Investor's Business Daily

Coming off of a horrible year for the wireless sector and feeling a bit bruised, Nextel Communications Inc. is more anxious than ever to set itself apart from the pack.

Fears of slower subscriber growth led to a 49.5% average drop in wireless company valuations in 2000. Nextel, which provides digital wireless services, is still 71% off its high set last March. It's fighting back by trumpeting the quality, rather than quantity, of its customers.

See company chart on Page B16

Nextel's average user spends close to $75 a month for wireless service. The industry average is $53, says Sean Butson, analyst at Legg Mason Wood Walker Inc. The combination of high user fees and low subscriber turnover rates -- 2% vs. the typical 2.5% -- means Nextel's lifetime revenue per subscriber is $3,750. That's 79% higher than the industry average.

"Nextel has maintained a strong advantage in subscriber quality for several years," Butson said.

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