Nextel's back in the US and shooting for a $30bn valuation

The owner of the Nextel brand is heralding its re-entry into the US market and is looking for investors to help it along the way.

But looking beyond all the whooping and hollering, and talk of a return to the halcyon days of a US$30 billion market valuation – which was never Nextel’s alone, incidentally – it’s clear that there’s a lot of hot air here.

Nextel Mobile Worldwide, which owns the IP related to the Nextel brand that disappeared from the US mobile market almost a decade ago, is on the hunt for investors to help it finance a relaunch and the attainment of some lofty – and arguably unreachable – growth targets.

“We are thrilled that this beloved American iconic telecommunications brand with its new 4/5G LTE, Nextel Chirp app and other emerging technologies is once again available to the business community as well as personal use,” said Jeffrey Kaplan, CEO of Nextel Mobile Worldwide, in an announcement designed to attract investor interest.

“Nextel’s ultimate goal is to re-sign the 20 million former Nextel business subscribers, to reopen over 5,000 Nextel brand new dealer locations providing needed job opportunities and to once again become a company valued at over $30 billion,” Kaplan declared.

Right. Let’s break that down a bit, shall we.

Nextel may well have had 20 million subscribers when it was bought by Sprint in 2005, and there is no doubt that it’s iDEN-based walkie-talkie service was popular with many, but that’s getting on for 17 years ago and a staggering amount has changed in the industry in that time. It probably suffices to point out that that’s a couple of years before the launch of the first iPhone.

The $30 billion market value Kaplan refers to was actually ascribed to the merged Sprint Nextel in 2013, the same year that Sprint closed down the iDEN network and ditched the Nextel brand on its takeover by Japan’s Softbank. It’s debatable how much of that market value Nextel can lay claim to, but clearly not much.

Finally, a quick look at Nextel Mobile Worldwide’s crowdfunding page – that’s right, we’re not talking in-depth talks with big name PE firms here – shows that the firm has raised just over $9,000 so far.

We all know the saying about little acorns, but in the context of the global telecoms industry, you probably need at least a healthy sapling if you’re looking to grow a mighty oak.

Nonetheless, the relaunch of Nextel does bring the prospect of new competition into the US market, albeit on a small scale, and that’s rarely a bad thing.

In fact, Nextel has been serving small businesses there since 2018, offering handheld and vehicular-mounted devices and airtime through an MVNO deal with AT&T.

It is not this Nextel – known as Nextel Inc – that is looking for investors though, but rather the aforementioned Nextel Mobile Worldwide, which currently makes its money purely from licensing the brand and related intellectual property to Nextel Inc. However, Nextel Mobile Worldwide aims to get into the service provider market itself and that’s why it needs funding.

In its own words:

“Nextel Mobile Worldwide’s future plans include expanding to directly offer cellular airtime subscriptions and cellular devices to the business enterprise and consumer cellular markets instead of licensing its intellectual property assets.”

Presumably we won’t end up with two Nextels on the market though; the brand owner is clearly looking to build on any momentum built up by the service provider over the past few years.

But it’s going to need more than $9,000 to do that, and the market’s established players are unlikely to be quaking in their boots just yet.