Nextel Posts First Quarterly Profit

The USA based iDEN network, Nextel Communications has reported its first ever quarterly profit. Domestic revenues increased 25% to approximately US$2.2 billion and domestic operating cash flow increased 69% to a record US$816 million over the same period last year.

Nextel added approximately 471,000 domestic subscribers during the second quarter finishing the quarter with approximately 9.64 million domestic subscribers. The company expects to end the year with 10.7 million subscribers.

"Strong customer demand for our unique and differentiated services and a keen focus on operational and capital efficiencies helped make this a breakthrough quarter for Nextel," said Tim Donahue, Nextel's president and CEO. "We're growing market share, attracting high value subscribers and exceeding all expectations for incremental cash flow. This great progress gave us the confidence to prudently invest our cash and opportunistically reduce our indebtedness and preferred securities by $1.5 billion in face amount. This significant reduction will save Nextel about $2.5 billion over the next nine years in foregone interest, principal and dividends. The combination of accelerated cash flow, reduced expenditures and the gain from our significant debt reduction activities generated our first-ever positive quarterly net income. Nextel's iDEN-based advantages are starting to pay off - and with the help of Motorola - we are improving our network efficiency and we have solid plans to further expand our Direct Connect(R) service."

Nextel's average monthly service revenue per domestic subscriber increased from US$68 to US$71, significantly higher than other national wireless carriers, driven largely by greater customer usage and changes in pricing plans. Nextel's customer retention rate remained among the best in the industry with customer churn holding flat at 2.1%.'"

Posted to the site on 17th July 2002