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by nextel18    Apr 28, 2004, 7:39 PM

Nextel tests flexible plans in some markets
Wednesday April 28, 8:24 pm ET

NEW YORK, April 28 (Reuters) - Nextel Communications Inc. (NasdaqNM:NXTL - News) said on Wednesday it has begun testing a more flexible way of charging for its mobile phone services with an aim to keep existing customers and attract new subscribers.

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Reston, Virginia-based Nextel is letting customers who talk for more time than allowed in their monthly service plans, automatically upgrade to a costlier plan with more minutes -- in a small number of markets, Nextel spokeswoman Audrey Schaefer said.

This option means that talkative customers would pay a set amount extra if they go over the agreed minutes and avoid the unpredictability of expensive per-minute charges that kick in when subscribers talk for longer than expected.

Bear Stearns analyst Philip Cusick said in a research note that the plan was in line with efforts by other phone companies to raise revenue from recurring rather than one-off charges.

Sprint Corp.'s (NYSE:FON - News) wireless business plans to make a rate-structure change in a similar direction in the middle of May, Cusick said.

Sprint declined to comment on Wednesday. But the company said it would soon introduce a new wireless offer when it reported its earnings last week.

In a similar spirit, Cingular Wireless, a venture of BellSouth (NYSE:BLS - News) and SBC Communications (NYSE:SBC - News), lets customers carry over spare minutes into the next month if they have not used up their minute allowance in a given month.

Expansion of the Nextel plan to its entire network would depend on issues such as customer popularity and the effect on revenue per user, Schaefer said.

Nextel's stock was down 27 cents or 1.1 percent at $24.76 in Nasdaq trading on Wednesday. »

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