hit the ball out of the park Thursday when it detailed a second quarter in which it not only signed up Street-beating customer ranks, but got those fresh faces to spend 13% more time on the phone.
Coupled with solid new consumer numbers from
wireless arm and AT&T Wireless affiliate
, the wireless market has managed to avoid the pickle of so many industries trapped by the U.S. economic slowdown. Tuesday morning, newly independent AT&T Wireless and intriguing capital-seeker Nextel will report their numbers to a much calmer set of wireless investors.
AT&T Wireless has finally stepped up to the plate a free agent, fresh off a July 9 spinout that gave it freedom from Ma Bell. After an initial downtick as the market absorbed billions of shares, AT&T's stock has risen almost 5%, to Friday's close of $17.26. Investors are hopeful that AT&T Wireless can inspire enough confidence in several big international clubs -- including current stockholder
-- to field acquisition requests or at the very least get the stock boost from entertaining offers.
The Street expects AT&T Wireless to lose a penny on $3.2 billion in revenue. Scouts will be straining for the mix of Wireless' new customers, to see if it bulked up on low-end consumers going after cheaper prepaid plans. Investors docked AT&T Wireless for similar tactics in the first quarter because prepaid customers are easier to acquire -- misleadingly decreasing the cost-per-gross-addition metric followed by the Street -- but more likely to drop their plans and spend less per month, eating away at the average revenue per user.
Back on the bright side, AT&T Wireless was the first U.S. carrier to roll out the next-generation general packet radio service, or GPRS, that will allow users to run data applications on their phones more easily than current technology allows. The service began Tuesday in Seattle only, and details of further efforts will be appreciated as investors try to figure out when advance-service revenue will beef up carrier top lines. AT&T Wireless has said it will roll out GPRS to 40% of its customers by the end of 2002.
Nextel is caught in a less futuristic, more day-by-day jam, as it struggles to convince the market that it can be fiscally calm enough to foul off pitches from screwballing capital markets. It raised $1 billion in a May offering to alleviate concerns. Again, management's discussion of funding and capital needs will dominate the quarterly report. The Street has its hopes set on a 54 cents-a-share loss on $1.8 billion in revenue.
Sprint PCS wowed investors with strong new subscriber additions of 843,000 and fanny-slapping churn improvement to 2.2%. The wireless tracking stock spent less to acquire customers (though still a whopping $340) but managed to get $2 apiece more out of them, or $61, despite new accounting that trimmed $2 of that metric. All-important EBITDA took a step up to $491 million, flooring Street estimates that were in the $300 million range.
When you get 11.2 million customers to spend more as Sprint PCS did, things are looking up. The market will look to AT&T Wireless and Nextel to show they're in the same league.