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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.