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Nextel Hopes New Boost Is Cool

Nextel Communications, Inc., , the nation's fifth largest wireless carrier that has mostly focused on the business market, is teaming with Boost Mobile, a "lifestyle-based" telecommunications brand that will exclusively target the youth market in the United States.

Boost Mobile will initially launch in September in the test markets of California and Nevada, with service provided on the all-digital Nextel network. Boost will offer wireless phones at affordable prices in locations where youth prefer to shop. Consideration of a broader rollout of the strategy will be dependent upon Boost Mobile's performance in its test markets.

The financial impact of the launch is already reflected in the business plan upon which Nextel based its 2002 financial guidance.

"Boost Mobile will offer the first true youth brand in the wireless market in the United States," said Tom Kelly, Nextel's executive vice president and chief marketing officer. "We chose to go after this customer segment with the Boost Mobile leadership team because of their unparalleled expertise in developing wireless offerings that are uniquely suited to the lifestyle and behaviors of young people. Bolstered by Nextel's unrivaled walkie-talkie, two-way messaging, wireless web and Java-enabled gaming capabilities, the Boost Mobile proposition is very exciting."

The company expects to launch with six Boost Mobile-branded Motorola wireless phones, the majority of which will feature built in Java-enabled technology, hands-free speakerphones, digital cellular calling, 250-entry phonebook, voicemail, two-way text messaging and Boost 2WAY digital walkie-talkie service, all powered by Nextel.

Boost Mobile will offer a pay-as-you-go service, with pricing to be announced upon the launch of this service.

Games are an integral feature of the offering and Boost Mobile has already secured an agreement with international entertainment software publisher THQ Inc. . The wireless phones will be preloaded with Tetris and World Wrestling Entertainment.

Boost Mobile will also feature a phone with a color screen, pre-loaded ring tones, and THQ Java-technology games Astrosmash, Snood and MotoGP. When the service launches, it expects to offer a variety of downloadable games from other leading youth game companies.

Key to the Boost Mobile branding and awareness strategy is the sponsorship of action sports events and teams, television programs, festivals, concerts, and other youth-centric activities. Boost plans to secure the endorsements of sports athletes from around the world, including surfing, skateboarding, snow boarding and motocross.

Boost also has secured a media and licensing partnership with popular youth fashion and lifestyle brand Quiksilver and has a strategic relationship focused on events and sponsorships with surf brand Billabong. The company plans retail distribution channels that will include national retailers and convenience stores, as well as non-traditional outlets such as youth fashion retailers that focus on music, surf, skate and snow-related activities.

Added Peter Adderton, a founder and member of the Irvine, Calif.-based Boost board, "It quickly became clear to the Boost team that only one nationwide wireless provider in the United States offers any true service differentiation, and that is Nextel with its digital walkie-talkie and leading wireless data network. American youth are technically savvy, have considerable spending power, and demand instant communications. Boost Mobile will leverage the unique handset designs, service features, quality and brand credibility of the Nextel National Network to offer the first wireless lifestyle device for American youth, rather than "youth-repackaging" traditional wireless phone service."