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Nextel Communications Inc. |  |
From the April 28, 1997 Washington Post
| '96 (in $ 000s) | % Change From '95 | |
| Revenue | 332,938 | 93.9 |
| Net Income | (556,020) | -- |
| Rank Last Year: None | ||
Nextel is building a digital wireless communications network in many U.S. communities. Its flagship product, now available in more than 235 cities, including the Washington-Baltimore area, is a combination cellular telephone and dispatch radio that handles voice calls, messaging and data communications to groups or individuals. The company also provides wireless dispatch services to hundreds of thousands of customers using older, analog technology.
Business Resume:
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Nextel hired a new chairman in the summer of 1996, MCI Communications Corp. veteran and longtime Washington area executive Daniel F. Akerson. Among his first acts was to move Nextel from Rutherford, N.J., to a new headquarters in McLean last August.
With a $1.1 billion cash infusion from cellular mogul Craig McCaw, Nextel intensified efforts to roll out its digital cellular dispatch service in 1996. Nextel says earlier troubles with its unusual phone technology, which is being provided solely by Motorola Inc., are behind the company.
Revenue last year increased 94 percent, though acquisitions and aggressive network investments pushed losses to $556 million from $331 million a year earlier. Nextel's performance led investors to push its stock to $13 on Friday, down almost 50 percent from a high of $24 in June. But the low trading price also puts it on the "buy" lists of many analysts.
By year's end, Nextel had 300,300 of its new digital units in operation in seven markets, with revenue per unit rising 51 percent, to $56 per unit. Overall, the company signed up more than 1 million dispatch and cellular customers.
In March the company embarked on an aggressive advertising campaign, reducing prices for its handsets to $199 and billing customers' calls by the second, after the first minute (this is intended to set it apart from cellular companies that bill by the minute). It also announced free "roaming"—use of the units outside customers' home market.
Having raised $2 billion in financing, Nextel said it would build 85 percent of its nationwide digital network by the end of next year. Included in that figure is $500 million raised by Nextel's international division, McCaw International Ltd., to fund planned digital systems in Argentina, Brazil and the Philippines.
In October Nextel bought Wireless Ventures of Brazil Inc. for roughly $186 million in Nextel stock from Arlington wireless entrepreneur Rajendra Singh. The deal gives Nextel access to the 10 largest cities in Brazil, whose populations total 60 million.
Also in October, Nextel purchased Pittencrieff Communications Inc. of Abilene, Tex., for $159 million in stock, expanding Nextel's presence in the southwestern United States.
Copyright 1997 The Washington PostncG1vNJzZmivp6x7uK3SoaCnn6Sku7G70q1lnKedZMSxedKrrWiapai2r7HSrGalp56cwaa%2BzGinqKukZ31xe8Oaq5pnkpvBpHyTa2WhrJ0%3D