The company today said it is launching the Nextel Online service in 43 major markets and expects to offer it nationwide by midyear.
Nextel Online will be available at a flat-rate of $14.95 per month, in addition to the standard monthly voice service fees, for access to MSN Mobile and other Web sites. The announcement comes nearly a year after Microsoft invested $600 million in Nextel with the intention of delivering Web portal content to mobile consumers.
Analysts believe the market for mobile data will explode as consumers begin to use Internet-enabled handsets and as high-speed wireless technologies improve. International Data Corp. today predicted the market for mobile commerce transactions in Western Europe alone will surpass $37 billion by 2004.
Nextel will use technology from Phone.com to provide Net access. The company's deal with Phone.com could be viewed as curious given the sizable stake in Nextel by Microsoft, which makes competing microbrowser software.
Separately, Nextel will offer a variety of applications developed specifically for mobile phones. eDispatch, a tool for industries such as construction and transportation, will be available for $39.95 per month. IBM Mobile Connect, a $9.95 per month service, will allow customers to use their Nextel phones as modems to retrieve email, calendars and contact information on handheld computers.
Previously, the carrier offered one-way text messages of up to 140 characters for varying monthly fees.
Because the company has a high proportion of business customers, some analysts believe the wireless Net access service will be popular.
"Given that roughly 40 percent of Nextel's customers have Internet-capable phones, we believe the uptake rate should be high," WR Hambrecht wireless analyst Peter Friedland wrote in a report today. He maintains a "buy" rating on the stock and has a $200 price target for the shares.
"As a result, we expect wireless Internet penetration to reach 5 percent to 10 percent of Nextel's customer base by year-end," he added.
The company, which has 4.5 million subscribers, is set to report first-quarter financial results tomorrow before the stock markets open. On average, financial analysts expect the company to lose 90 cents per share, according to First Call/Thomson Financial.