Nextel Communications Inc. Chief Executive Officer Tim Donahue admitted that while the wireless industry will encounter bumps associated with the impending local number portability mandate, he expects Nextel to gain market share following the Nov. 24 implementation date.
“We believe Nextel will be a beneficiary in the portability theater,” Donahue said during a UBS Warburg conference.
Donahue added that he does not expect the mandate to alter the carrier’s industry-leading customer churn results, which Nextel reported at 1.4 percent during the third quarter, and reiterated the carrier’s full-year financial and subscriber targets that include $1 billion in free cash flow and approximately 2.2 million new subscribers.
Donahue also downplayed the competitive threat of recently launched push-to-talk services by Verizon Wireless and Sprint PCS due to their higher latency, and said he does not expect rival technologies to match its iDEN technology-based Direct Connect service in the near future.
In addition, Donahue noted that Nextel is working on a deal with its former international subsidiary NII Holdings Inc. to provide its Direct Connect push-to-talk service in Mexico, Brazil, Argentina and Peru during the second quarter of next year and expects a deal to sell push-to-talk service in Canada where Telus Mobility currently offers an iDEN-based walkie-talkie service.
In an unrelated story, WorldCom Inc. is reportedly in talks with Nextel for a deal that would allow the one-time wireless reseller to again offer wireless services using Nextel’s network. If the deal falls through, industry analysts said WorldCom could turn to T-Mobile USA Inc., which many have noted has excess capacity on its GSM-based network.
