Nextel Partners Sees 32% Gain In Sales

WASHINGTON (Dow Jones) -- Nextel Partners Inc. said Tuesday that third-quarter revenue rose 32% on a preliminary basis, while the company added a record 107,200 wireless-phone customers.

Nextel Partners (NXTP) ended the quarter with to $445.2 million in service revenue. The company also said revenue per user rose $1 to $69 from the second quarter, as the Kirkland, Wash.-based carrier ended with 1.9 million customers.

On Monday, Nextel Partners shareholders are expected to approve a vote on whether to exercise an option that would require Sprint Nextel Corp. (S) to buy the smaller wireless concern.

Sprint has argued that it should not have to pay as much as Nextel Partners expects. The situation is headed toward arbitration and may not be resolved until early to mid-2006.

Nextel Partners will issue full quarterly results on Oct. 27.

The wireless-phone company sells Nextel-branded phone service in rural and mid-tier markets and depends on the success of the Nextel brand. Yet that brand is likely to be phased out in long run in favor of Sprint.

Sprint obtained a one-third stake in Nextel Partners via its recent acquisition of Nextel Communications. Shares of Nextel Partners it doesn't already own are valued roughly at $4.5 billion.

In addition, Sprint-Nextel might have to add a premium based on the "fair market value," as determined by an independent assessment.

Sprint has already said it won't negotiate a buyout of Nextel Partners Inc., clearly signaling it doesn't want to pay the full market value for its rural affiliate.

Under the put option, Sprint Nextel and Nextel Partners can each hire an appraiser to determine the "fair market value" of Nextel Partners.

If the two appraisers provide valuations more than 10% apart, a third appraiser would be hired to resolve the matter. Sprint said the process could take at least four months, but analysts think it could take a lot longer unless the two companies reach an accord.

(END) Dow Jones Newswires"

Posted to the site on 18th October 2005