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April 6 2004 Home

Trade Event Report
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Merrill Lynch Communications Investors Conference, + + + +
By Al Berrios (contact Al Berrios)

Merrill sure knows how to organize conferences. This particular event brought together all the leading companies with stakes in the consumer wireless market, from handset makers, to semiconductor companies, to internet telephony. Hosted at New York's Grand Hyatt, it was huge. Although I missed most of it, I did arrive in time on the first day, March 17, to listen to Nextel and Bellsouth.

Nextel is a premium priced product, despite their walkie-talkie feature which supposedly makes it affordable. Like all other wireless firms, they're strategically focused on their tech, financing, and spectrum licenses. They're tactically focused on expanding use of their network with broadband offerings, sub-brands such as Boost Mobile, and increased use of their formerly unique push-to-talk functionality. Our recent study on consumer sentiments towards their wireless carriers revealed that Nextel is liked by 51% of consumers, on par with their peers.

BellSouth was an interesting case. Half-owner of Cingular, Ron Dyke, it's CFO, had more to say from a strategic perspective. They viewed their portfolio of businesses, including wireless, as just that, investments (as opposed to core competencies). If they viewed them any other way, it'd be harder to dispose of their wireline businesses (just recently, in Latin America, but ultimately, in the U.S.), as they increase their investments in Cingular (who recently won their bid to acquire AT&T Wireless).

One nifty tid-bit I picked up from Ron's incredibly boring presentation was their confirmation that a top reason consumers choose a carrier is their choice of handsets. Aside from their making a big stink about their cool handsets, this also confirms an unexpected finding from our study: when asked for their carrier, most consumers said the name of their handset manufacturer, as if they didn't perceive any differentiation between handset manufacturer and carrier.

Overall, I believe this conference merits four (4, + + + +) pluses for content, venue, and networking opportunity. Frankly, had I arrived earlier, stayed longer, and hadn't found the speakers terribly dry, it may have easily merited five pluses.

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