Subject: [NEXTEL-1] AT&T Wireless to delay high-speed Internet service

From: Marcel <[email-masked]>
Date: Fri, 27 Dec 2002 11:25:29 -0500

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Friday, Dec 27, 2002

Technology

Posted on Thu, Dec. 26, 2002

AT&T Wireless to delay high-speed Internet service

Bloomberg News

AT&T Wireless Services will delay its high-speed Internet service and deliver it to fewer cities as demand from businesses slows.

The company and Japanese partner NTT DoCoMo will start the service in San Francisco, Seattle, Dallas and San Diego by the end of 2004, AT&T Wireless said in a statement. After DoCoMo agreed in 2000 to become the carrier's biggest shareholder, AT&T Wireless had said it would start selling the so-called third-generation service in 13 of the largest U.S. cities by June 2004.

AT&T Wireless follows rivals including Nextel Communications in delaying an offering enabling subscribers to send e-mail and access the Internet more than 100 times faster than on older networks. The new services are aimed at business customers, which pared spending during the U.S. economic slowdown.

``Investors are demanding capital-spending reductions,'' said Guzman & Co. analyst Pat Comack, who rates AT&T Wireless shares ``outperform'' and doesn't own them. ``Carriers will make money on this when businesses open up their pocketbooks again.''

Shares of Redmond, Wash.-based AT&T Wireless fell 13 cents to $6.33 Thursday. They have fallen 56 percent this year, as U.S. wireless companies add customers at the slowest pace ever.

AT&T Wireless has spent about $2.5 billion upgrading its networks to reach third-generation standards, spokesman David Caouette said. The expansion is designed to allow customers to make calls, transmit video and listen to music in the United States and abroad. AT&T Wireless aims to offer the services to about 7.5 million people.

The company in October forecast capital spending of about $5.1 billion this year, and less than $4 billion in 2003. It had a third-quarter net loss of $2.04 billion as expenses rose and sales growth slowed.

``Our rollout of W-CDMA will be carefully timed and targeted, and enable us to make the most efficient use of our capital,'' AT&T Wireless Chief Executive Officer John Zeglis said in the statement.

Nortel Networks, Ericsson and Nokia supply AT&T Wireless with gear for the services, Caouette said.

AT&T Wireless had about 20 million customers at the end of September and is the third largest U.S. mobile-phone operator. Verizon Wireless is the biggest with 31.5 million subscribers.

The delay is the latest setback for DoCoMo, which developed the wideband code-division multiple access technology, or W-CDMA, the new service is based on. The standard hasn't been used yet in the United States. DoCoMo has had problems with its high-speed service, dubbed FOMA, which has fallen short of subscriber goals in Japan.

Vodafone Group, the world's biggest mobile-phone company, and other European operators, which paid $100 billion for high-speed wireless licenses, have also delayed network upgrades amid weaker-than-expected demand for the new services.

Italy's H3G, which is controlled by Hutchison Whampoa, had said it would introduce the new high-speed mobile access in September. That target was moved back to December and the company hasn't begun the service.

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