Like buzzing cicadas, wireless investors are getting louder as the summer progresses.The growing chorus of enthusiasm turned up a few notches last week, thanks to a strong sales update from sector darling Nextel ( NXTL). The king of the wireless business communications niche said Thursday that 2003 revenue could top the $9.9 billion currently projected as its unique walkie-talkie features continue to attract and keep customers. But Nextel isn't the only wireless shop entertaining newfound consumer demand despite a tepid economy and rabid competition. It seems a crop of snazzy new phones, heavy promotions and lavish retention offers from telcos are bringing people into stores and keeping would-be defectors from bolting. Encouraged by the level of sales activity usually reserved for the holiday season, some analysts and investors expect second-quarter earnings reports to show gangbuster sales results.
Sprint has since
changed management and cut costs, and it boasts the best lineup of fancy phones in the industry. As the hedge fund manager points out, "It cost the carrier $300 to acquire you. So don't be surprised to find that they will pay you $100 or offer you a new color-screen phone for free to keep you." Of course, come Nov. 24, when customers can keep their phone numbers as they jump around to other carriers, that purchase of that loyalty will be put to a stronger test.