Nextel has reported a 24% increase in revenues.
Nextel has reported a fourth quarter net profit of $1.46 billion, compared to a net loss of $1.79 billion last year. Its revenues were up from $1.88 billion to $2.33 billion.
For the year to December 31, it reported a net profit of $1.66 billion, compared with a net loss of $2.85 billion, on revenues of $8.72 billion. The fourth quarter figures were lifted by a pre-tax gain of $1.22 billion from the deconsolidation of Nextel’s 36% stake in NII Holdings.
Looking forward, Nextel forecast free cash flow of $500 million, and EBITDA of $3.8 billion or more. It also expects to add another 1.7 million subscribers.
The Reston, Virginia-based mobile operator is the fifth largest mobile phone carrier in the United States, and has managed to add 503,000 customers during the quarter, bringing its total subscriber case to 10.6 million. It has the US industry’s highest average revenue per subscriber, reporting $69 per month in the fourth quarter, although this was down from $71 in the previous period.
Nextel phones offer a walkie-talkie service called Direct Connect, which allows users to push a single button and connect with another Nextel user. This service is typically free as long as the other user is in the local coverage area. Users can even specify a group of Nextel users (up to 100) that they can connect to all at once, similar to a dispatcher’s radio as used by police or taxi companies.
Once this system is fully rolled out in the US, a caller on the East Coast will be able to use the phone as a walkie-talkie and talk to another caller in California, for a fraction of the cost of a normal cellular call. This unique service is already proving to be an attractive option and there is little doubt that Nextel is capturing an increasing market share in the competitive US wireless marketplace.
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