Subject: [NEXTEL-1] Nextel offers differentiated product that's popular with construction industry

From: Marcel <[email-masked]>
Date: Tue, 17 Dec 2002 14:58:58 -0500

Nextel offers differentiated product that's popular with construction industry

Source: Quad - State Business Journal
Publication date: 2002-11-01
Arrival time: 2002-12-16

With four or five companies offering cell phone service in the Quadstate
region, just about the only way to compete is by lowering prices or offering
more free minutes. The volume of advertisements in local papers is
testimony to the competitiveness of the wireless phone market.

Adding to market confusion is the fine print of those ads, where a calculator
and a map of the United States are often needed to find the best deal.

One company with a different product is Nextel, which features
DirectConnect, a cell phone that acts like a two-way radio or walkie talkie.
Most of its sales are to the business community, particularly the
construction market. Sales to governmental emergency service agencies
are also on a fast track.

With over 10 million customers, the No. 5 U.S. wireless phone company is
gaining market share as several competitors lost customers in the third
quarter.

While competitors average $50 of monthly revenue per customer, Nextel
collects $71, the highest rate among large wireless phone carriers. It has a
churn rate of 2.0% compared to other wireless phone companies' 2.7% to
3.0% rate.

Nextel has a setup similar to SunCom and AT&T, where SunCom
markets AT&T Wireless service under its own name in small rural markets,
and AT&T keeps the urban markets to itself. Nextel Communications, the
Reston, Va.-based parent company, works the big markets, and Nextel
Partners Inc. has the small markets. In the Quad- state region, Nextel
Partners uses subagents to sell the service.

"DirectConnect distinguishes it from the others," said Scott Dickinson,
indirect sales manager at Mid-Atlantic ProTel Systems in Martinsburg.
"Free incoming calls is a big selling point."

Mid-Atlantic ProTel sells Nextel service in Washington County and from
Greencastle up to Harrisburg, but no service is available in the Eastern
Panhandle.

Chris Grant in the Mid-Atlantic ProTel Hagerstown office said sales are to
labor intensive businesses. "They like the sturdy phones which are resistant
to shock, dirt and water. A lot of companies are starting to compete with
them on price."

"We've had Nextel here for about 18 months," said Ron Henderson, sales
person in the Smart Communications office in Winchester. "Sales have
been wonderful, with about 95% going to businesses. With DirectConnect,
using the radio feature streamlines everything. Customers were using
pagers, radios and cell phones, but with Nextel they can do all that with one
device."

Henderson said the construction industry and everything related, including
Realtors and subcontractors, are the number one customers. "It's a different
corporate philosophy than with the other wireless companies," he said.
"We're not targeting kids, credit risks and businesses that won't be around
in six months."

If Nextel's towers in the Eastern Panhandle were operating, Henderson said
Smart Communications could double its business. "Nextel Communications
owns the tower, but they don't think the market there is big enough."

http://cnniw.yellowbrix.com/pages/cnniw/Story.nsp?story_id=35185799&ID=cnniw&scategory=Business+and+Finance&

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