[and how will that merger, AT&T and Cingular, effect the sponsorhip of #31 Robby Gordon’s RCR Chevy, is unknown, but that merger could take months even years – Yahoo Biz].
Susan B. Kalla, an analyst for Friedman, Billings, Ramsey Group Inc., says yes. She gives Nextel at most two years before it succumbs to a merger or acquisition. Combinations like Cingular Wireless and AT&T Wireless will achieve enough cost savings to “put smaller players like Nextel at a competitive disadvantage,” Kalla said. “Nextel will be forced to do some consolidation.” Viktor Shvets, an analyst for Deutsche Bank, says not necessarily. “When niches come under pressure there are two things you can do,” he said. “You can either try to become better and better at what you do, or you can bulk up and become a much larger carrier.” Nextel’s trademark service has been its walkie-talkie [very cool feature, Jayski loves it], which allows users to reach people by pushing a button to talk instead of dialing phone numbers. The feature first attracted construction workers and truck drivers [like Jayski’s Dad and Pop], but eventually became popular among professionals who need to be in constant communication with customers and co-workers. Over 90 percent of Nextel’s 12.3 million customers are businesspeople, according to the company. Analysts said Nextel could pursue two strategies. It could become a specialty player, offering businesses increasingly sophisticated wireless services, such as remote access to company databases or live video feeds over its networks. Or it could evolve into a broad wireless company, possibly by merging with Sprint. The company’s strategy has nurtured rapid growth. Nextel reported a 22 percent yearly increase in subscribers at the end of September, and its stock more than doubled in 2003. Analysts expect that trend to continue when Nextel reports fourth-quarter earnings tomorrow.(see full story at Washington Post – need to reg to view)(2-18-2004)