Cellular Migration: One Year Later
I had Nextel on my mind all holiday weekend. Well, that and deciding when it was time for more stuffing & yams.This past Thanksgiving marked the one year anniversary of the Numbers Portability Act, which--in order to improve consumers' options--allowed cell phone users to switch their carriers without losing their coveted number. Previously, cell phone users had feared the obvious--that a new phone policy would mean losing the same number friends, family, and business associates had known for years. That's a lot of floating numbers--there are almost 172 million mobile phone customers in the United States compared to 152 million last year.
As of the legislative change, roughly 8 million users have made the leap to another carrier. However, that figure fell well short of the 30 million experts had predicted for 2004. About 800,000 or 10 percent moved their home phone number to a wireless service, the U.S. telecom regulator said. As far as market winners were concerned, Verizon(VZ) and Nextel (NXTL)--the latter having the lowest "churn" or turnover rate in the industry--enjoyed big gains in their stock price. Nextel, in fact, was one of the biggest winners of 2003-2004. Nextel's pioneering walkie talkie function means they grab a different slice of the market--namely the contractors, hospital workers, and farmers who would have to make some rather onerous changes should they ever decide to equip their entire outfit with a new brand. On the other side of the coin, AT&T Wireless lost so many customers that they ultimately had to put the for sale sign up and capitulate to a tender offer from Cingular last Fall.
Catablast! predicts mega-consolidation within the cell phone industry; ultimately, we believe there will be only 2 or 3 North American carriers. We just 'call' them as we see them.
(D.A. Jacome no longer owns Nextel shares)
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