Subject: [NEXTEL-1] 16-Oct-03 Goldman Sachs On Nextel

From: [email-masked]
Date: Wed, 22 Oct 2003 08:36:18 -0400

16-Oct-03 Goldman Sachs (GOVERNALI NEWYORK) NXTL NXTL: Superior Operating
Performance But Valuation Remains Rich;
Reit U/C

NXTL 3Q03 results beat our ests on all key metrics, which emphasizes the
benefit of a differentiated offering and highlights NXTL's operational
excellence. Churn of 1.4% is best in class, and the 50bp decline since 1Q
stands out given NXTL's churn had been so low. ARPU strength offset higher
sales and mktg costs and helped drive margins to an impressive 43%.
However, our early review suggests valuation is rich, with strong results
priced in but downside risk from WLNP and PTT competition not yet
reflected. Mgmt's view that NXTL will be a net winner in WLNP matches the
comments of all other carriers who also assume a degree of rational
behavior never seen in the US wireless market. We agree NXTL will be among
the least affected by WLNP. But we feel NXTL increasingly is exposed to
competitive pressure from other carriers as it moves into the mass market.
We expect growth to slow in 04 as new PTT competitors impede its growth in
the mass market and we see churn and sales and mktg costs rising once WLNP
arrives. We reit our U/C rating on NXTL shares.

======================  NOTE  1:00 PM  October 16, 2003

Stk Cvg   Latest  52 Week  Mkt Cap
YTD Pr   Cur
Rtg View  Close    Range     (mm)
Change  Yield
--- ----  ------  -------  --------  --
----  -----
Nextel Communications          U   C    22.12    22-9    22872.1
92%    0.0%

NXTL                       -----------------Earnings Per Share-------
EPS*          (US$)        Mar      Jun      Sep      Dec
FY       CY
2004  FY     NA       NA       NA       NA
1.05     NA
2003  FY     0.20A    0.27A    0.35     0.30
1.11     NA
2002  FY(A)  -0.35    -0.05    0.14     0.21     -
0.05    NA

GSCOPE EPS*   (US$)        Mar      Jun      Sep      Dec
FY       CY
2004  FY     NA       NA       NA       NA
NA       NA
2003  FY     NA       NA       NA       NA
NA       NA
2002  FY(A)  NA       NA       NA       NA
NA       NA

-Abs  P/E  on-   -Rel  P/E  on-   EV/NxtFY
LT EPS
Cur     Nxt      Cur     Nxt     EBITDA
Growth
------  ------   ------  ------  ---------  --
EPS*             FY     19.9X   21.1X     0.9X    1.0X
NA       NA
CY        NA      NA       NA      NA
NA       NA
GSCOPE EPS*      FY
NA       NA
CY        NA      NA       NA      NA
NA       NA

* may differ from U.S. GAAP

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