Subject: [NEXTEL-1] Jefferies & Company on The Nextehell

From: Marcel <[email-masked]>
Date: Wed, 15 Jan 2003 16:39:26 -0500

NXTL: Reit Hold - Investors are gaining visibility into long-term NXTL issues like
spectrum needs & technology migration. NXTL`s shares have popped as it reduced its
outstanding debt & investors equated current differentiation with longer-term viability.
We are cautious at these levels; NXTL will need to show its high ARPU is sustainable, that
push-to-talk cannot be copied by its CDMA competitors, & that its network expanding
technology works, to justify further price improvement. In 4Q NXTL should add 460k subs,
up 22% to 10.6 mm. Churn should rise 10 bps QoQ to 2.1%. ARPU should rise 1% YoY to $70.
Revs should rise 22% YoY to $2.3 bn as a lower ARPU is offset by a higher sub base. EBITDA
margins should remain flat QoQ at 40%, generating $877 mm, a 63% rise YoY. Cost of new sub
acquisition is high as NXTL opens new stores, despite NXTL`s promoting its low costs
channels such as its website and telesales.

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