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ESMR STOCKS ARE AT THE MERCY OF A HAND-WRINGING WALL STREET

Fluctuating support from Wall Street for enhanced specialized mobile radio companies may be indicative of in-and-out stock speculation rather than fear the ESMR companies are having actual problems, said the head of the American Mobile Telecommunication Association.

“Wall Street is fickle, with investors looking for short-term profits. Also, a lot of attention is moving to PCS (personal communications services),” said Alan Shark, AMTA president.

Two recent events involving ESMR operators OneComm Corp. and Nextel Communications Inc. suggest that Wall Street is concerned about the viability of ESMRs. When Denver-based OneComm recently filed a quarterly report with the Securities and Exchange Commission, the company noted service charges had been partially waived along the Colorado Front Range and will be waived initially in the Seattle-Portland, Ore., markets because of glitches in the systems. News publications reported the company was having problems starting service and OneComm’s stock fell 7 percent. The stock was trading at $18.13 Nov. 29.

OneComm President Justin Jaschke said the SEC report contained nothing new. “Waiving service charges in case of glitches is a policy we disclosed when we launched the (Colorado) system in June. We’re doing the same thing in Seattle and it’s not uncommon with the complexity of the technology,” Jaschke said.

Lessons learned in the Front Range rollout have benefited the Seattle system, Jaschke noted. “The system in Colorado is stable now and we expect to charge in full in December. We’re just beginning to load customers in Seattle and should be off and running by the first of the year.”

Companies such as OneComm should be looked upon as long-term investments, Shark said. “Some investors may have expected something to turn up quickly, but we won’t see dramatic returns for some time to come, the next year or two. ESMR companies talk about long-term growth time to build up systems.”

In the bond market, Nextel’s 9.75 percent coupon senior bonds maturing in 2004 recently fell three points. No new announcement accompanied the drop, except perhaps the resignation of Joel Schleicher, executive vice president and president of the company’s SMR operations division. Schleicher will leave Nextel this coming January to pursue other interests.

While ESMR technology isn’t experimental, the companies are young and turning on digital service is a learning experience, Shark said. “Also, people aren’t feeling great about the economy, and bonds that are not blue chip suffer the greatest.”

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