Subject: [NEXTEL-1] A long-awaited flood of customers looking to switch their mobile phone service failed to materialize on Monday...

From: [email-masked]
Date: Tue, 25 Nov 2003 10:14:32 -0500

Reuters
Monday November 24, 9:29 pm ET
By Sinead Carew

(Adds company, analyst quotes)

NEW YORK, Nov 24 (Reuters) - A long-awaited flood of customers looking to switch
their mobile phone service failed to materialize on Monday, the first day of new
rules that let users switch their phone numbers to a new provider.

The new rules are expected to shake up an already competitive wireless industry
as customers can more easily leave services they don't like. People can also
swap their home phone number to a mobile phone under the rule.

While customers did not appear to rush en masse to take advantage of the new
rules, some wireless companies reported a jump in inquiries. But not everything
went according to plan.

Verizon Wireless (NYSE:VZ - News; London:VOD.L - News), the No 1 U.S. provider,
said on a media conference call late on Monday it had difficulty switching
customers to one rival that used a different services company from the rest of
its peers.

Of the six largest U.S. cell-phone providers, only AT&T Wireless (NYSE:AWE -
News) does not use Tampa, Florida-based TSI Connections as the intermediary
between it and its rivals, industry sources said. AT&T Wireless officials were
not immediately available for comment.

Verizon and Deutsche Telekom's (XETRA:DTEGn.DE - News) T-Mobile USA gave the
clearest indications of a busy day. Between two and four times more customers
than usual, for a Monday in November, visited its stores or called it, said
Verizon spokesman Jeffrey Nelson.

TSI Connections spokeswoman Helen Harris said the number of people who switched
their service on Monday was at the lower end of analysts' predictions ranging
from 1 million to 9 million.

Several analysts expected Verizon to be the main beneficiary of the new rules
due to a perception that its network works better than those of its peers.

"Anecdotally, I think Verizon's advertising message about better network quality
is paying off," said Legg Mason analyst Craig Mallitz. "Whether it's real or
perceived, it seems to be paying off."

T-Mobile USA spokesman Bryan Zidar said the number of people calling its
telephone representatives looking to become customers was 400 percent higher
than on an average Monday.

AT&T Wireless spokesman Mark Siegel said the company was not unusually busy
handling inquiries resulting from the new rules. "So far, from what we see
(volume is) light," he said early Monday afternoon.

One AT&T Wireless customer made her way to a cell-phone store in a briskly
coldChicago on Monday in the hope of getting a better deal.

"I've been waiting for this day," said Ann O'Connor, an IT support employee at
an investment bank who was looking for better network coverage and a cheaper
deal.

Cingular Wireless (NYSE:SBC - News; NYSE:BLS - News), which has the second most
customers in the country, said it had signed up more customers than expected via
its Web site on Monday.

Phone companies have been gearing up for the switch with new marketing and price
plans and new technology.

They spent about $1 billion to make their networks ready for swapping phone
numbers with rivals and could spend as much as $3 billion more next year in
efforts to hold on to their customers and win new ones, according to research
analysts at SG Cowen.

AT&T Wireless shares closed up 4 percent at $7.31 on the New York Stock Exchange
(News - Websites) , while Sprint PCS finished up nearly 6 percent at $4.61.
Nextel (NasdaqNM:NXTL - News) shares closed up $1.08, or about 4.7 percent, at
$24.09 on the Nasdaq..

Shares of BellSouth Corp. and SBC Communications Inc., which together own
Cingular, closed up slightly on the New York Stock Exchange on Monday afternoon.
Verizon, which owns Verizon Wireless with Britain's Vodafone, saw its stock
finish up just under 1 percent at $32.50. (Additional reporting by Ben Klayman
in Chicago, Wei Gu and Jessica Hall in New York)

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