Week of October 4, 1999
  Blockbuster Deal of the Week
   from Site Selection's exclusive New Plant database

Yes, Virginia, Nextel Says:
New 700-Employee Operation Headed for Hampton

Virginia has landed Nextel Communications' (www.nextel.com) new 700-employee technical and customer support operations center in the city of Hampton.

Though Nextel was already headquartered in Reston, Va., siting the new facility in Virginia certainly wasn't a foregone site selection conclusion, said company officials. Nextel, they explained, looked at a number of other locations in the U.S. Southeast region, with the final decision coming down to sites in Virginia and North Carolina.

"Nextel has selected the Hampton Roads area to locate our new facility because of its central location and good demographics for staffing a high-quality customer care center," explained Nextel's Mid-South Region Area President Scott Hoganson.

Bagging the Nextel expansion marked Virginia's latest success in landing high-tech operations, a trend that Gov. Jim Gilmore noted at the formal announcement of the new Hampton facility.

"Nextel's choice to locate in Hampton Roads makes Virginia home to yet another company whose products and services are among the most advanced in the new economy," Gilmore said. "I'm committed to keeping Virginia a global technology leader. Nextel's wireless products and services cement that role further."


Move Comes During Nextel's Hot Spell

The new facility was announced at a time when Nextel is enjoying robust health. Blossoming into a major provider of digital wireless services, the company has amassed a U.S. work force that alone totals some 10,000.

For second quarter 1999, Nextel reported a record number of quarterly additions to its domestic digital subscribers. Second-quarter 1999's 440,000 new subscribers brought the company's total for U.S. digital subscribers to more than 3.6 million, a 76 percent increase over total U.S. subscriber units in service at the end of the second quarter of 1998.

Second quarter 1999 also saw Nextel increasing average monthly digital revenue per domestic subscriber by some US$74. That result mirrored the "steep increase in the average number of minutes used per month by wireless consumers" noted in the recently released J.D. Power and Associates (www.jdpower.com) 1999 U.S. Wireless Customer Satisfaction Study. "Relatively simple, competitive pricing policies" have pushed monthly minutes of wireless usage to 242 in 1999 from 199 in 1998, said the J.D. Power study. In addition, the study added, "This upward trend could continue since consumers report having more than 300 minutes per month available with their calling plans."

Said Nextel CFO Steve Shindler, "Second quarter results put us on track to exceed our 1999 growth targets. Nextel's domestic operations produced more than $15 of positive cash flow per subscriber each month [during second quarter 1999]." Nextel is also rapidly growing its international presence. Through Nextel International, the company has established wireless operations and investments in Canada, Mexico, Argentina, Brazil, the Philippines, Peru, Japan and Shanghai, China.

The company's growth has been particularly substantial, though, in the United States. U.S. operations produced $155.5 million in positive operating cash flow during the second quarter, up 90 percent from first quarter's $81.8 million in domestic operating cash flow. Worldwide, Nextel's operating cash flow at the end of this year's second quarter was $108.9 million, a 204 percent increase over first quarter 1999's cash flow.

In addition, Shindler added, Nextel received some $2 billion in additional funding during second-quarter 1999, "[which] ensured the necessary capital to fund the continued efficient deployment of the Nextel National Network."


Few Incentives Disclosed

The new center in Hampton will serve that rapidly growing network and its customer base.

Few details have been released concerning the incentives Virginia offered to land the new Nextel facility. Gov. Gilmore said that he has approved a $500,000 grant from the Governor's Opportunity Fund to assist Hampton with preparation of the Nextel site. In addition, the Virginia Department of Business Assistance (www.dba.state.va.us) will provide workforce-training services for the new Nextel employees.

Teamwork also apparently was a major factor in facilitating Virginia's landing the new facility. The Virginia Economic Development Partnership (www.yesva.com), the City of Hampton (www.hampton-development.com) and the Peninsula Alliance for Economic Development (www.vpedc.org) all assisted Nextel in its site search, Gilmore said.

Added Hampton Mayor Joseph H. Spencer II, "We are extremely pleased with how all the public and private entities cooperated to bring this telecommunications giant to Hampton."


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