Nextel postpones 1X announcement

The industry has long anticipated an announcement from Nextel Communications regarding plans to migrate its integrated Digital Enhanced Network (iDEN) to CDMA 1X technology, but Nextel CEO Tim Donahue said the company has decided to upgrade iDEN technology by doubling voice capacity and enhancing data compression for now.

“After careful consideration of our various technology and strategic options, Nextel has decided to go forward with enhancements to its existing iDEN network,” said Donahue. “We are confident the technology advances give us the flexibility to carefully choose our future technology path and remain competitive in our service offerings.”

Through a deal with its sole vendor, Motorola, Nextel expects to offer packet data speeds of between 60 kbps and 70 kbps by 2002 and double its voice capacity by 2003.

Credit Suisse First Boston believes Nextel will stay with iDEN technology until at least 2004/2005. Nextel’s stock increased 25.27% this morning to $9.22. Analysts said investors have been concerned about the capital expenditures Nextel would need to build a 1X system. Qualcomm, which would have received new royalty streams from Nextel, saw its stock fall $1.05 per share to $43.76 in mid-afternoon trading.

--Lynnette Luna, senior editor