Nextel According to Nextel\'s 2003 Annual Report,

Nextel

According to Nextel's 2003 Annual Report, more than 12 million Nextel subscribers logged more than 101 billion minutes of use, pushed the walkie-talkie button more than 75 billion times and transmitted 11.9 terabytes of data. However, this success may be one of Nextel's major Achilles Heel. This traffic represented a rise of 37% over 2002. The company needs a faster network to support this volume increase and is also having problems because it uses the same frequencies as police and fire departments. It needs to acquire a different wireless spectrum from the Federal Communications Commission (FCC). This is easier said than done. Nextel has requested a spectrum in the 1.9-gigahertz range, but it may instead be given a 2.1-gigahertz spectrum, which requires more expensive wireless gear. And, Nextel's competitors, namely Verizon Wireless, continue to place pressure on the FCC to raise the price for the spectrum and to delay Nortel's access. Strategically, the most important thing that Nortel needs to accomplish is the acquistion of the wireless spectrum.

Push-to-talk technology offered in DirectConnect represents Nextel's primary competitive differentiator in the wireless industry. In the first quarter of 2004, Nextel's income jumped to $591 million, an 184% increse, in an industry plagued by stiff price competition. Much of this is because DirectConnet allows Nextel to obtain higher revenue per subscriber and a very low customer churn rate. However, many of Nextel's competitors are producing like produts and the company must protect its market share by continually enhancing DirectConnect services. The majority of Nextel's customers are business users and that's the area where DirectConnect services should receive the most attention. One area of focus for this target segment should be customers who would like wireless access to applications other than email. Nextel has forged a partnership with Vettro and Salesforce.com to deliver wireless salesforce automation, but needs to be more proactive in this area.