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Technology Business Research Ranks Nextel No. 1 in 3Q03 Benchmark Results

Posted on: Friday, 5 December 2003, 06:00 CST

Nextel Communications retained the No. 1 position in Technology Business Research's quarterly benchmark of U.S. mobile operators for the third consecutive quarter. TBR's benchmarking methodology places a premium on growth and profitability, the key drivers of a successful business model. Nextel is the industry leader, generating $71 in average revenue per user. Nextel continues to grow quarter after quarter due in large part to its industry-leading subscriber retention and Direct Connect walkie-talkie service for the business market segment.

Nextel and Verizon Wireless are the two mobile operators that distinguish their operations from the pack. Verizon Wireless is near the top in the TBR mobile operator benchmark quarter after quarter due to its strong brand, market share leadership, profitability and continued growth. Verizon Wireless' success is attributed to its broad network coverage and network quality.

TBR believes the clear winners in the new wireless local number portability environment will be Verizon Wireless and Nextel. AT&T Wireless and T-Mobile USA will remain in neutral positions while Sprint PCS and Cingular Wireless are likely losers. Number portability and shifting industry dynamics may drive Cingular and AT&T Wireless into a merger in 2004. Both Cingular and AT&T Wireless are losing market share to Verizon Wireless. "It makes perfect sense from a technology and cost perspective for AT&T Wireless and Cingular to merge," stated TBR analyst Chris Foster. "The largest obstacle confronting Cingular acquiring AT&T Wireless is Cingular's owners, SBC and BellSouth, structuring a complicated ownership arrangement."

"Even before the dust settles on number portability in 2004, the telecom industry structure and competitive environment in the United States will be further redefined as operators seek to differentiate themselves on bundled fixed and mobile services," according to Bill Lesieur, director of Network Business Quarterly (NBQ), TBR's telecom industry practice. "In the consumer telecom market, the mobile phone and its visible menus of features and applications is a symbol of value that fixed line operators cannot do without in their value proposition."

 NBQ U.S. Mobile Operators 3Q03 Benchmark and Metrics* 
 Nextel      Verizon  Sprint  T-Mobile  Cingular  AT&T 
 Communications  Wireless  PCS      USA     Wireless Wireless NBQ Ranking          1          2       3        4          5        6 NBQ Score          6.55       5.68    5.38     5.36       4.87     4.48 Market Dynamics Subscriber 
 Market Share       8.2%      23.9%   10.2%     8.0%      15.5%    14.5% Year-to-year 
 Subscriber 
 Growth            22.1%      14.3%    6.6%    36.1%       5.9%     8.4% ARPU                $71        $50     $63      $54        $51      $61 Business Model Year-to-year 
 Revenue Growth    26.7%      18.2%    5.8%    66.1%       4.6%     7.7% Profitable          Yes       Yes       No      No         Yes      Yes Cash Position      $3.5       **      $1.5     $195        $1.3    $4.2 
 billion            billion  million     billion  billion Long-term Debt    $10.7       **      $14.2    $7.6       $12.7    $10.6 
 billion            billion  billion     billion  billion 2G Network         IDEN      CDMA     CDMA   GSM/GPRS    TDMA/GSM TDMA/GSM 2.5/3G 
 Migration Path   WiDEN    cdma2000 cdma2000 EDGE/UMTS  EDGE/UMTS EDGE/UMTS Investors        Motorola   Verizon  Sprint   Deutsche   SBC Comm.   NTT 
 Comm.    FON     Telekom       and     DoCoMo 
 and                        BellSouth 
 Vodafone *  Metrics from NBQ benchmark methodology displayed in table above. ** Not reported directly; Verizon Communications has $1.7 billion in cash 
 and equivalents and $38.9 billion in long-term debt. 

ABOUT TBR

Technology Business Research, Inc., headquartered in Hampton, N.H., is recognized as one of the leading high-tech market research and consulting firms specializing in the analyses of computer, software, networking equipment, wireless, professional services companies and customer satisfaction studies. Serving a domestic and international clientele of high-tech manufacturers, IT professionals, end users and financial executives, TBR has continually distinguished itself in the marketplace by providing timely, accurate, high-quality information, market research and business intelligence in a format that is uniquely responsive and tailored to clients' needs. TBR analysts are available to further address client-specific issues or information needs on an inquiry or proprietary consulting basis.

Founded in 1996, Technology Business Research, Inc. covers the business and financial performance of more than 50 of the world's largest IT and telecom vendors and service providers, including Cisco, Dell, Hewlett-Packard, IBM, Lucent, Microsoft and Verizon Wireless. We publish approximately 424 strategic, company-centered reports annually. Our focus is on trends analysis, identifying vendor strengths and weaknesses, and highlighting opportunities and threats for individual companies going forward.

TBR's Network Business Quarterly service provides coverage of the leaders in wireless network infrastructure, mobile phones, mobile operators and the mobile Internet. NBQ covers the six leading U.S. wireless carriers: AT&T Wireless, Cingular Wireless [BellSouth and SBC Communications joint venture], Nextel Communications, Sprint PCS, Verizon Wireless [Verizon Communications and Vodafone joint venture] and T-Mobile USA (Deutsche Telekom subsidiary). NBQ also includes coverage of Alcatel, Cisco, Ericsson, IBM, Lucent, Motorola, Nokia, Nortel, Samsung and Siemens.

Complete reports are available to accredited journalists. For more information, please visit TBR's Web site at www.tbri.com.

 Bill Lesieur NBQ Director Technology Business Research, Inc. 603-929-1166 lesieur@tbri.com
 Jon Lindy Vice President of Sales and Marketing Technology Business Research, Inc. 603-929-1166 lindy@tbri.com

SOURCE: Technology Business Research

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