Subject: [NEXTEL-1] New Verizon Wireless Push-to-Talk Service Siphoning Interest from Nextel; Compete, Inc. Finds Nextel Will Lose Subscribers to Verizon Wireless When Latency Issues Are Resolved

From: [email-masked]
Date: Mon, 03 Nov 2003 11:19:21 -0500

November 03, 2003 08:37 AM US Eastern Timezone

New Verizon Wireless Push-to-Talk Service Siphoning Interest from
Nextel; Compete, Inc. Finds Nextel
Will Lose Subscribers to Verizon Wireless When Latency Issues Are
Resolved

BOSTON--(BUSINESS WIRE)--Nov. 3, 2003--Verizon Wireless' entry into
push-to-talk services this summer, a market dominated by Nextel, raised
questions about the sustainability of Nextel's competitive advantage.
Early analysis of the launch from Compete, Inc. indicates that the new
Verizon Wireless push-to-talk service will siphon subscribers from
Nextel once latency issues with its service are resolved. According to
Compete's analysis, almost two-thirds of Nextel subscribers who
considered switching to an alternative carrier in September evaluated
Verizon and one third of those subscribers researched push-to-talk.

"Push-to-talk services will not be a growth driver for new entrants into
the market until these carriers can produce response times that match
those of Nextel's Direct Connect(SM) offering," said T. J. Mahony,
Compete's senior wireless analyst. "The strong interest we are observing
in Verizon among Nextel subscribers, however, demonstrates that Nextel's
market position is clearly at risk once carriers improve the performance
of their push-to-talk services," added Mahony.

To assess how this new competitive entry has impacted the wireless
market, Compete analyzed the online research and purchase behaviors of
several million consumers to understand consumer demand and purchase
intentions for the new push-to-talk offering. The market potential for
this service is sizable; reportedly 11 million Nextel subscribers, or
90% of the customer base, have used Direct Connect. And already 25-35%
of Nextel's subscribers have used Nationwide Direct Connect, its
expanded walkie-talkie capability launched coast-to-coast this year.

According to Compete's proprietary analytic, Share of Purchase Intent
(SPI), the Verizon Wireless launch did not substantially improve its
already high market share among in-market wireless shoppers (Compete's
SPI tracks the relative percentage of pre-purchase consideration
carriers command across the market). Compete did find, however, that the
level of Nextel subscribers actively evaluating Verizon nearly doubled
from August to September. Further, Compete found that push-to-talk was a
primary component of this surge in interest - approximately 40% of those
Nextel subscribers evaluating Verizon considered its push-to-talk
services. In contrast, only 11% of Sprint PCS subscribers who evaluated
Verizon researched push-to-talk services.

Compete, Inc. Shows Nextel is Highly Vulnerable to Verizon Wireless
(Percent of "pre-churn" customers evaluating Verizon Wireless -
customers who have not yet switched carriers but who have begun
evaluating Verizon Wireless online)

2003:Q1  2003:Q2  2003:Q3    Jul      Aug      Sep
AT&T Wireless    39%      43%      41%      39%      42%      44%
Cingular         40%      43%      46%      48%      43%      48%
Nextel           40%      33%      45%      37%      35%      64%
Sprint PCS       33%      32%      38%      37%      36%      40%
T-Mobile         35%      37%      44%      45%      43%      43%

Despite this growth in interest, in the short-term, Compete believes
that the slow response times of Verizon's push-to-talk services will be
a barrier to switching for interested Nextel subscribers.

"While Nextel's exposure will be most evident among business customers,
where the loss of a single account will result in deactivations among
all of the corresponding subscribers in that network, we do see an
opportunity for Nextel to erect porting barriers in the consumer market
that carriers will find harder to overcome," added Mahony. "Whereas it
is relatively easy for a business to roll-out a new wireless service
across its user base, in consumer markets there are larger hurdles to
porting. Over time, consumers establish a push-to-talk network of
friends and family and for these individuals it is very difficult to
coordinate switching carriers among all of them."

About Compete, Inc.

Compete provides the earliest indication of actual consumer behavior
available, which gives clients the information needed to improve the
effectiveness of customer acquisition, servicing cross-sell and
retention. Compete has proven that online data on consumer behavior is a
predictive indicator of total demand and purchase intent - both offline
and online. Compete leverages its database of the daily behavior of more
than 10 million online consumers to offer industry-specific Intelligence
Services consisting of predictive analytics that provide insights into
total demand and purchase intent, which Compete's experts interpret to
provide clear, actionable, recommendations. Since launching its services
Compete has provided major auto manufacturers, multi-line banks and
wireless carriers with a new and unique vantage point on their customers
and competitors not previously available. For more information visit the
company's website at www.compete.com.

Direct Connect and Nationwide Direct Connect are registered service
marks of Nextel.
http://home.businesswire.com/portal/site/google/index.jsp?ndmViewId=news_view&newsId=20031103005530&newsLang=en

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