NEXTEL DOUBTS OPPONENTS WILL SEEK STAY OF REBANDING ORDER
The benefits of the 800 MHz rebanding order are so significant for public safety groups that it’s unlikely rival carriers will go to court to seek a stay when the order is eventually released by the FCC, Nextel Senior Vp Robert Foosaner said Wed. during an earnings call with analysts.
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“The decision right now is very favorable to public safety,” Foosaner said. “It reduces interference. It increases the useful spectrum by 455, and it’s fully funded, if we understand it correctly. The benefits to public safety are so substantial that I believe that will sway the opponents of the original consensus plan.” Foosaner added that the plan is hard to oppose because of the politics: “To pursue a stay would be a slap in the face to first responders. I do not believe that the corporations who are opposing this would deem that to be a responsible action.”
Also on the call, Nextel CEO Timothy Donahue repeated earlier statements that the company wouldn’t comment on the order until it’s released by the FCC. Foosaner said: “We're concerned that the retuning rules be correct, the timing be correct, the costs be appropriate.” Company officials said they would update 2004 guidance following release of the rebanding order.
The FCC Wireless Bureau has been laboring to release the order prior to the Assn. of Public Safety Communications Officials meeting starting Aug. 8. But sources say making that deadline could prove difficult.
Meanwhile, Nextel said net profit had risen to $1.3 billion for the quarter, compared to $281 million a year earlier. Nextel also said it added 546,000 subscribers, with a monthly churn rate of 1.6%. Revenue was up 29% from the 2nd quarter of 2003 to $3.3 billion.
AT&T Wireless, meanwhile, said Wed. it has customer churn more under control, falling to 3.3% for the quarter, from 3.7% in the first quarter. Cingular officials have pointed to AT&T Wireless’s losses as a key reason they're hopeful of wrapping up their merger with the carrier as quickly as possible. “Churn this year will continue to be a challenge,” Michael Keith, pres. of mobility services, told analysts on a conference call.
AT&T Wireless also said 2nd-quarter revenue was up 3.3% from the first quarter to $3.871 billion, although earnings fell 73% in the quarter from a year ago. “Our second quarter results show we are on the rebound from our disappointing first quarter,” said Chmn. John Zeglis. “We had an impressive turnaround in net additions, our [operating income before depreciation and amortization] climbed back over $1 billion, and our services revenue was up. We signed a record number of new customers for a second quarter, and it was the fourth consecutive quarter in which we've added more than 2 million new customers.” Officials also highlighted the company’s announcement that it’s launching high-speed Internet services in 4 cities.
In other financials, Motorola reported a 2nd-quarter net loss of $203 million, compared to a profit of $119 million in the year-earlier quarter. Revenue was up 41% to $8.7 billion.
U.S. Cellular said revenue increased to $662.7 million for the 2nd quarter, up 9% from the year-ago quarter. Net income was $38 million compared to a net loss of $1.7 million. The company reported churn of 1.5% per month.