Nextel Communications Inc. said it more than doubled its 1998 subscriber unit base to a total of 2.96
million, adding more than 1.5 million domestic digital subscribers during the year, including 372,500 new subscribers
during the fourth quarter.
The enhanced specialized mobile radio operator said fourth-quarter domestic usage
reached 3.1 billion total system minutes of use on the Nextel National Network, or about 400 average monthly minutes
of use per subscriber. Nextel Business Networks, aimed at increasing the productivity of industry-specific targeted user
groups through the use of Nextel Direct Connect service, or two-way radio service, now accounts for about 26 percent
of the 2.8 million domestic digital subscriber units in service at year-end, said the company.
Average revenue per
unit remained at $70 during the fourth quarter, and the domestic monthly digital churn rate was about 1.8 percent for
the year and approximately 2 percent during the fourth quarter. Consolidated revenue was $1.8 billion for the year and
$592 million for the fourth quarter, while consolidated net loss attributable to common shareholders for the fourth
quarter was $413 million, or $1.43 per share, and is comprised of $1.11 per share from domestic operations and 32
cents per share from international operations.
Total international digital subscriber units in service for Nextel
International Inc. and its affiliates were about 619,000 at year-end 1998, up from the third-quarter total of
472,000.
The company said it expects to grow its subscriber base in 1999 each quarter by 350,000 to 400,000 per
quarter and maintain ARPU in the high $60 range.
“We’re working on driving down our capex per net
add,” Daniel Akerson, chief executive officer and chairman of Nextel, told analysts last week. “As funding
becomes available, we may look to geographically expand our network, but we’re working on
profitability.”
The Nextel National Network now reaches subscribers in 92 of the top 100 U.S. markets.
Nextel Partners, a separately funded entity, plans to expand Nextel’s footprint, covering 33 million pops in 39 markets
within three years in mid-sized and smaller markets.
“Nextel is on the threshold of becoming one of the
premier nationwide service providers,” said Timothy O’Neil, wireless analyst with SoundView Financial Group
in Stamford, Conn. “They have yet to claim that position. The concern is that they slowed down in the fourth
quarter. Markets slowed down, and they couldn’t raise additional funds.”
However, since the third quarter,
Nextel has raised more than $1 billion through selling its towers as well as through a high-yield note offering and
expansion of bank and vendor facilities. Nextel Partners now has adequate funding as well.
“This positions
them to invest again in infrastructure. Nextel will work on filling in holes while Nextel Partners will focus on rolling
out markets,” said O’Neil.
