Subject: [NEXTEL-1] ANAL-YSIS: Nextel’s declaration of iDENdependence

From: Marcel <[email-masked]>
Date: Fri, 20 Dec 2002 13:13:18 -0500

ANALYSIS: 
Nextel’s declaration of iDENdependence 

December 20, 2002  
By Kirk Laughlin  
America's Network Weekly  

FAIRFIELD, Conn.— Nextel’s attachment to nonconformance used to lead many to believe that
the carrier was bereft of communal life-support and would ultimately suffer from
self-imposed technological isolation.

During the last 12 months, however, the operator has shown that isolation could never be
sweeter or more empowering. Compared with other battle-weary mobile carriers, Nextel has
sauntered through 2002 with little to no injury, and in fact, has generated increased
respect for cutting capex, growing its customer base, taking a conservative stance on
wireless data and sticking loyally to its platform of choice, Motorola’s once-ridiculed
iDEN technology.

Furthermore, only Nextel has seen its shares crater and then resiliently climb over the
past year, from less than $3 to more than $12 by year-end. The company’s share
performance, technology road-map and unique services like Direct Connect are suddenly in
vogue, at least on Wall Street. No longer is Nextel the next Rodney Dangerfield. Instead
the carrier more closely resembles Jim Jeffords, the Vermontsenator who quit the
Republican Party in 2001 on ideological grounds and declared himself an independent.

Nextel executives seem aware that independence has its risks, and a very real one is the
possibility, as Barry West, Nextel’s chief technical officer suggested in a conference
call this week, of losing the wireless data wars. 

West explained that the economic rationale for wireless data has yet to surface. As a
result, the carrier will stick mostly to its voice-focused strategy, targeting both
consumers and high-value business customers through solutions-based selling.

The Nextel strategy was on display earlier this week at a corporate technology summit,
where the operator teamed with Motorola to outline the carrier’s 2002 performance, the
outlook for 2003 and enhancements to iDEN.

Highlighting the discussions was the announcement that Nextel plans to install Motorola
voice coder software into its network, enabling six cellular calls on a single radio
channel, more than doubling current capacity.

“This cost-effective enhancement to our existing iDEN network brings Nextel what we
believe is the most important benefit of 3G technology — voice capacity,” said West.
“Other wireless carriers are forced to spend billions on entirely new platforms to achieve
similar gains in capacity.”

Handsets that support the new 6:1 voice coder and include assisted global positioning
services and longer battery life will be introduced later in 2003.

The carrier also revealed further details of its program to expand Direct Connect, the
popular and original walkie-talkie feature, across its nationwide footprint by the middle
of 2003.

The bottom line of the conference — that the Nextel-iDEN marriage is shrewdly engineered
to weather just this sort of difficult industrial climate — seemed to serve as a stern
rebuttal to those that had written the carrier off. 

For the last five quarters, Nextel has had the best operating margins in the industry .
Executives also applaud iDEN for enabling the carrier to maintain a high level of capital
efficiency. 

In other words, GSM and CDMA carriers may have the upper hand in economies of scale, but
Nextel is not collapsing as a result. Instead, the carrier appears to have benefited from
straying from the pack. — Kirk Laughlin

http://www.americasnetwork.com/americasnetwork/article/articleDetail.jsp?id=41831

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