Nextel Telecommunication Industry

Instead of utilizing conventional telephone technology, wireless phones broadcast conversations across radio frequencies which can just as easily be applied for other purposes. Trucking firms and taxicab corporations have long applied radio frequencies for exactly this purpose.

Recognizing the potential for non-industrial use, Nextel's founder (Morgan O'Brien) began buying up the rights to hundreds of radio frequencies which have been formerly employed by trucking corporations and taxicab companies. Nextel purchased these frequencies within the nation's largest cities and combined access towards the airwaves with its virtual technology. Digital technology provides clearer broadcasts and increases the capability on the procedure to handle much more calls. Though O'Brien and his partner, Brian McAuley, can also be credited for recognizing an opportunity which was largely ignored by other companies, the competition (which included McCaw Cellular at the time) did not seem favorably on their innovative thinking ("Fortune Visits," 1993, p. 62).

Cellular companies, including the RHCs and McCaw Cellular, sued Nextel during the early years over a basis that the FCC permits only a couple of mobile operators for each city and that Nextel's access into the industry violated this arrangement. The competition wanted Nextel to formally petition to use the frequencies it had acquired for cellular use, a procedure which would take 3 years (on the average) and which would severely limit.

 

Two key managers at Nextel have backgrounds from MCI Communications. The chairman from the board, Daniel Akerson, came to Nextel in 1996 as the company's chief executive and board chairman; he also serves over a boards of American Express and The us OnLine. His background is concentrated in high technology companies, having a specific emphasis from the telecommunications industry: in between other management positions within MCI, Akerson was president and chief operating officer at MCI Communications during the 1983 to 1993 period. MCI also provided the training for Nate Davis, Nextel's executive vice president in charge of technical services. Davis was chief financial officer at MCI along with chief operating officer for 1 of MCI's divisions plus a senior manager serving in various other capacities during the MCI organization. In addition, Davis worked at AT&T just before joining MCI ("Leadership," 2000, p. 1).

As of mid-1999, Nextel's total digital subscribers in 5 key markets totaled 250,000; these markets included Argentina, Brazil, Canada, Japan and Shanghai. The remaining 600,000 international subscribers had been located throughout the rest with the markets wherever Nextel participates. It must also be noted that Nextel's participation inside the international market is according to its ownership interest in wireless businesses throughout the world. This strategy of having an ownership share in organizations located in several international regions methods that Nextel can achieve entry to markets effortlessly whilst avoiding the start-up costs commonly associated with entering new markets. In addition, this process permits Nextel to use experienced personnel familiar on the various markets and the critical achievement factors associated with particular international regions ("International Growth," 2000, p. 1).

Although the virtual wireless market is usually accepted being focused within the United States, there's considerable future opportunity within the international market.

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