UNITED STATES
 SECURITIES AND EXCHANGE
    COMMISSION
 Washington, D.C.
    20549
      Form 10-Q
   þ

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)  OF THE
    SECURITIES EXCHANGE ACT OF 1934For the quarterly period ended
    September 30, 2008ORo

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the transition period
    from          to    Commission file
    number: 0-32421
      NII HOLDINGS, INC.
 (Exact name of registrant as
    specified in its charter)
   Delaware

91-1671412(State or Other Jurisdiction
    of
    Incorporation or Organization)

(I.R.S. Employer
    Identification No.)1875 Explorer Street, Suite 1000
    Reston, Virginia(Address of Principal
    Executive Offices)

20190(Zip
    Code)   (703) 390-5100 (Registrants
    Telephone Number, Including Area Code)
   Not Applicable
 (Former Name, Former Address and
    Former Fiscal Year, if Changed Since Last Report)
  þ o
  12b-2
  Large
    accelerated
    filer þ
    Accelerated
    filer o
    Non-accelerated
    filer o
    Smaller
    reporting
    company o   Rule 12b-2 o þ
    Number of Shares OutstandingTitle of Class

on November 3, 2008Common Stock, $0.001 par value per share

165,782,002




---



##### 





NII
    HOLDINGS, INC. AND SUBSIDIARIES
  INDEX
   
 PagePart I. Financial Information.Item 1.


Financial Statements (Unaudited)Condensed Consolidated Balance Sheets 
    As of September 30, 2008 and December 31, 2007


2Condensed Consolidated Statements of Operations
    and Comprehensive Income  For the Nine and Three
    Months Ended September 30, 2008 and 2007


3Condensed Consolidated Statement of Changes in
    Stockholders Equity  For the Nine Months Ended
    September 30, 2008


4Condensed Consolidated Statements of Cash
    Flows  For the Nine Months Ended September 30, 2008
    and 2007


5Notes to Condensed Consolidated Financial
    Statements


6Item 2.


Managements Discussion and Analysis of
    Financial Condition and Results of Operations


20Item 3.


Quantitative and Qualitative Disclosures About
    Market Risk


57Item 4.


Controls and Procedures


58Part II. Other Information.Item 1.


Legal Proceedings


59Item 1A.


Risk Factors


59Item 6.


Exhibits


60   1




---



##### 



PART I 
    FINANCIAL INFORMATION  Item 1.
    Financial
    Statements. NII
    HOLDINGS, INC. AND SUBSIDIARIES



CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except par values)

Unaudited  September 30,


December 31,2008


2007ASSETSCurrent assetsCash and cash equivalents

$
1,393,514


$
1,370,165Short-term investments


90,420



241,764Accounts receivable, less allowance for doubtful accounts of
    $30,615 and $20,204


529,339



438,348Handset and accessory inventory


161,839



107,314Deferred income taxes, net


142,249



121,512Prepaid expenses and other


121,550



110,736Total current assets


2,438,911



2,389,839Property, plant and equipment, net


2,130,101



1,853,082Intangible assets, net


391,837



410,447Deferred income taxes, net


522,511



541,406Other assets


277,862



241,962Total assets

$
5,761,222


$
5,436,736LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilitiesAccounts payable

$
131,867


$
125,040Accrued expenses and other


459,251



436,703Deferred revenues


131,631



109,640Accrued interest


19,762



12,439Current portion of long-term debt


92,757



70,448Total current liabilities


835,268



754,270Long-term debt


2,291,569



2,196,069Deferred revenues


30,474



32,892Deferred credits


129,016



158,621Other long-term liabilities


167,259



126,511Total liabilities


3,453,586



3,268,363Commitments and contingencies (Note 5)Stockholders equityUndesignated preferred stock, par value $0.001,
    10,000 shares authorized  2008 and 2007, no
    shares issued or outstanding  2008 and 2007






Common stock, par value $0.001, 600,000 shares
    authorized  2008 and 2007, 165,782 shares issued
    and outstanding  2008, 169,910 shares issued and
    outstanding  2007


166



170Paid-in capital


958,188



1,091,672Retained earnings


1,364,428



1,003,799Accumulated other comprehensive (loss) income


(15,146
)


72,732Total stockholders equity


2,307,636



2,168,373Total liabilities and stockholders equity

$
5,761,222


$
5,436,736    2




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##### 



NII
    HOLDINGS, INC. AND SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
    AND COMPREHENSIVE INCOME
    (in thousands, except per share amounts)
 Unaudited
  Nine Months Ended


Three Months EndedSeptember 30,


September 30,2008


2007


2008


2007Operating revenuesService and other revenues

$
3,106,909


$
2,279,326


$
1,116,106


$
827,486Digital handset and accessory revenues


172,987



76,826



66,619



26,9173,279,896



2,356,152



1,182,725



854,403Operating expensesCost of service (exclusive of depreciation and amortization
    included below)


848,557



609,827



305,565



223,617Cost of digital handsets and accessories


455,876



320,608



162,478



112,066Selling, general and administrative


1,054,013



771,508



384,056



282,060Depreciation


285,490



209,877



102,712



73,552Amortization


25,434



7,040



8,907



3,6692,669,370



1,918,860



963,718



694,964Operating income


610,526



437,292



219,007



159,439Other income (expense)Interest expense, net


(124,092
)


(89,592
)


(42,466
)


(35,610
)Interest income


53,324



45,040



16,796



22,358Foreign currency transaction (losses) gains, net


(16,128
)


12,637



(56,434
)


6,838Debt conversion expense






(26,455
)






(26,455
)Other expense, net


(12,786
)


(986
)


(7,611
)


(1,619
)(99,682
)


(59,356
)


(89,715
)


(34,488
)Income before income tax provision


510,844



377,936



129,292



124,951Income tax provision


(150,215
)


(128,026
)


(37,506
)


(43,285
)Net income

$
360,629


$
249,910


$
91,786


$
81,666Net income, per common share, basic

$
2.16


$
1.52


$
0.55


$
0.48Net income, per common share, diluted

$
2.06


$
1.40


$
0.54


$
0.46Weighted average number of common shares outstanding,
    basic


167,312



164,942



165,696



170,000Weighted average number of common shares outstanding,
    diluted


186,196



185,098



174,415



183,621Comprehensive income, net of income taxesForeign currency translation adjustment

$
(88,362
)

$
53,544


$
(290,928
)

$
11,454Reclassification for gains on derivatives included in other
    expense, net


171



456



25



60Unrealized gains on derivatives, net


313



469



15



109Other comprehensive income


(87,878
)


54,469



(290,888
)


11,623Net income


360,629



249,910



91,786



81,666Total comprehensive income

$
272,751


$
304,379


$
(199,102
)

$
93,289    3




---



##### 



NII
    HOLDINGS, INC. AND SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENT OF CHANGES IN
    STOCKHOLDERS EQUITY
    For the Nine Months Ended September 30, 2008
    (in thousands)
    Unaudited
  AccumulatedOther


TotalCommon Stock


Paid-in


Retained


Comprehensive


StockholdersShares


Amount


Capital


Earnings


Income (Loss)


EquityBalance, January 1, 2008


169,910


$
170


$
1,091,672


$
1,003,799


$
72,732


$
2,168,373Net income














360,629







360,629Other comprehensive loss


















(87,878
)


(87,878
)Purchase of common stock


(5,555
)


(5
)


(242,665
)










(242,670
)Share-based payment expense for equity-based awards










53,172











53,172Exercise of stock options


1,427



1



33,763











33,764Tax benefit on exercise of stock options










22,246











22,246Balance, September 30, 2008


165,782


$
166


$
958,188


$
1,364,428


$
(15,146
)

$
2,307,636    4




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##### 



NII
    HOLDINGS, INC. AND SUBSIDIARIES
  CONDENSED CONSOLIDATED STATEMENTS OF CASH
    FLOWS
 For the Nine Months Ended September 30, 2008 and 2007
 (in thousands)
 Unaudited
  2008


2007Cash flows from operating activities:Net income

$
360,629


$
249,910Adjustments to reconcile net income to net cash provided by
    operating activities:Amortization of debt financing costs


6,753



4,683Depreciation and amortization


310,924



216,917Provision for losses on accounts receivable


60,728



33,199Foreign currency transaction losses (gains), net


16,128



(12,637
)Deferred income tax (benefit) provision


(41,853
)


31,336Utilization of deferred credit






(5,031
)Share-based payment expense


53,288



51,159Excess tax benefit from share-based payment


(14,634
)


Loss on short-term investments


4,368



Accretion of asset retirement obligations


5,754



4,271Other, net


2,112



(1,562
)Change in assets and liabilities:Accounts receivable, gross


(170,131
)


(129,059
)Handset and accessory inventory


(57,136
)


(39,435
)Prepaid expenses and other


(15,313
)


(24,171
)Other long-term assets


(52,186
)


(38,679
)Accounts payable, accrued expenses and other


107,531



98,017Current deferred revenue


25,234



15,455Other long-term liabilities


14,454



822Net cash provided by operating activities


616,650



455,195Cash flows from investing activities:Capital expenditures


(656,224
)


(499,748
)Payments for acquisitions, purchases of licenses and other


(7,983
)


(44,180
)Proceeds from sales of short-term investments


607,950



Purchase of short-term investments


(455,486
)


Transfers to restricted cash


(2,826
)


(12,259
)Other


1,930



1,568Net cash used in investing activities


(512,639
)


(554,619
)Cash flows from financing activities:Payments to purchase common stock


(242,670
)


(329,980
)Proceeds from issuance of convertible notes






1,200,000Borrowings under syndicated loan facilities


125,000



Repayments under syndicated loan facilities


(31,922
)


(9,152
)Proceeds from stock option exercises


33,764



89,610Payment of debt financing costs






(23,090
)Excess tax benefit from share-based payment


14,634



Proceeds from tower financing transactions


27,271



13,213Repayments under capital leases, license financing, tower
    financing and other transactions


(7,971
)


(4,014
)Net cash (used in) provided by financing activities


(81,894
)


936,587Effect of exchange rate changes on cash and cash
    equivalents


1,232



(351
)Net increase in cash and cash equivalents


23,349



836,812Cash and cash equivalents, beginning of period


1,370,165



708,591Cash and cash equivalents, end of period

$
1,393,514


$
1,545,403    5




---



##### 



NII
    HOLDINGS, INC. AND SUBSIDIARIES
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Unaudited  Note 1.
    Basis of
    Presentation  General.
  Form 10-K Form 10-Q
  Accumulated Other Comprehensive
    Income.
  September 30,


December 31,2008


2007(in thousands)Cumulative foreign currency translation adjustment

$
(13,729
)

$
74,633Unrealized losses on derivatives


(1,417
)


(1,901
)$
(15,146
)

$
72,732   Supplemental
    Cash Flow Information.
  Nine Months EndedSeptember 30,2008


2007(in thousands)Capital expendituresCash paid for capital expenditures, including capitalized
    interest

$
656,224


$
499,748Change in capital expenditures accrued and unpaid or financed,
    including accreted interest capitalized


(15,802
)


(33,817
)$
640,422


$
465,931Interest costsInterest expense, net

$
124,092


$
89,592Interest capitalized


6,398



4,266$
130,490


$
93,858Cash paid for interest, net of amounts capitalized

$
85,220


$
60,191Cash paid for income taxes

$
184,274


$
94,930     Net Income Per Common Share, Basic and
    Diluted.
 6




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##### 



NII
    HOLDINGS, INC. AND SUBSIDIARIES
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
            Nine Months Ended September 30, 2008


Nine Months Ended September 30, 2007Income


Shares


Per Share


Income


Shares


Per Share(Numerator)


(Denominator)


Amount


(Numerator)


(Denominator)


Amount(in thousands, except per share data)Basic net income per share:Net income

$
360,629



167,312


$
2.16


$
249,910



164,942


$
1.52Effect of dilutive securities:Stock options






1,482











4,051Restricted stock






270











612Convertible notes, net of capitalized interest and taxes


23,632



17,132







8,781



15,493Diluted net income per share:Net income

$
384,261



186,196


$
2.06


$
258,691



185,098


$
1.40   7




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##### 



NII
    HOLDINGS, INC. AND SUBSIDIARIES
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Three Months Ended September 30, 2008


Three Months Ended September 30, 2007Income


Shares


Per Share


Income


Shares


Per Share(Numerator)


(Denominator)


Amount


(Numerator)


(Denominator)


Amount(in thousands, except per share data)Basic net income per share:Net income

$
91,786



165,696


$
0.55


$
81,666



170,000


$
0.48Effect of dilutive securities:Stock options






1,412











3,268Restricted stock






318











301Convertible notes, net of capitalized interest and taxes


1,673



6,989







2,126



10,052Diluted net income per share:Net income

$
93,459



174,415


$
0.54


$
83,792



183,621


$
0.46   Purchase of Common Stock.
  Reclassifications.
  New Accounting Pronouncements. No. 157-1, No. 157-1, No. 157-2, No. 157-2, No. 157-2,
 8




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##### 



NII
    HOLDINGS, INC. AND SUBSIDIARIES
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
          No. FAS 142-3, FAS 142-3. FAS 142-3 FAS 142-3 FAS 142-3 FAS 142-3
 9




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##### 



NII
    HOLDINGS, INC. AND SUBSIDIARIES
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  FAS 142-3
  14-1, 14-1. 14-1 14-1 14-1 FSP APB 14-1
  Note 2.
    Fair
    Value Measurements    Level 1:
  Level 2:
  Level 3:
    Fair Value Measurements as of September 30, 2008


Fair Value as ofUsing the Fair Value Hierarchy


September 30,Short-Term Investments

Level 1


Level 2


Level 3


2008Available for sale securities  Nextel Brazil
    investments

$
4,178


$



$



$
4,178Available for sale securities  Enhanced cash fund






86,242







86,242$
4,178


$
86,242


$



$
90,420    10




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##### 



NII
    HOLDINGS, INC. AND SUBSIDIARIES
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
            Note 3.
    Intangible
    Assets    September 30, 2008


December 31, 2007Gross





Net


Gross





NetCarrying


Accumulated


Carrying


Carrying


Accumulated


CarryingValue


Amortization


Value


Value


Amortization


Value(in thousands)Amortizable intangible assets:Licenses

$
451,896


$
(60,059
)

$
391,837


$
446,222


$
(35,775
)

$
410,447Customer base


42,829



(42,829
)






42,617



(42,617
)


Trade name and other


1,746



(1,746
)






1,796



(1,796
)


Total intangible assets

$
496,471


$
(104,634
)

$
391,837


$
490,635


$
(80,188
)

$
410,447  11




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##### 



NII
    HOLDINGS, INC. AND SUBSIDIARIES
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    EstimatedAmortizationYears

Expense2008

$
33,4822009


32,1912010


32,1912011


32,1912012


32,191     Note 4.
    Debt    September 30,


December 31,2008


2007(in thousands)3.125% convertible notes due 2012

$
1,200,000


$
1,200,0002.75% convertible notes due 2025


349,996



349,996Brazil syndicated loan facility


300,000



175,000Mexico syndicated loan facility


249,300



279,355Tower financing obligations


196,847



177,199Capital lease obligations


77,308



75,436Brazil spectrum license financing


8,130



9,446Other


2,745



85Total debt


2,384,326



2,266,517Less: current portion


(92,757
)


(70,448
)$
2,291,569


$
2,196,069   3.125% Convertible Notes.
  2.75% Convertible Notes.
 12




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##### 



NII
    HOLDINGS, INC. AND SUBSIDIARIES
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Syndicated Loan Facilities.
      Tower Financing Obligations.
  Note 5.
    Commitments
    and Contingencies  Brazilian
    Contingencies.
      Argentine
    Contingencies.
   13




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##### 



NII
    HOLDINGS, INC. AND SUBSIDIARIES
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Turnover Tax.
            Universal Service Tax.
   14




---



##### 



NII
    HOLDINGS, INC. AND SUBSIDIARIES
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Legal
    Proceedings.
    Note 6.
    Income
    Taxes  non-U.S. jurisdictions
    Unrecognized tax benefits  December 31, 2007

$
67,955Additions for current year tax positions


6,642Additions for prior year tax positions


696Lapse of statute of limitations


(615
)Settlements with taxing authorities


(155
)Foreign currency translation adjustment


328Unrecognized tax benefits  September 30, 2008

$
74,851      15




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##### 



NII
    HOLDINGS, INC. AND SUBSIDIARIES
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    10-year
       16




---



##### 



NII
    HOLDINGS, INC. AND SUBSIDIARIES
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Note 7.
    Segment
    Reporting    Corporate


IntercompanyMexico


Brazil


Argentina


Peru


and other


Eliminations


Consolidated(in thousands)Nine Months Ended September 30, 2008Service and other revenues

$
1,583,235


$
976,665


$
378,379


$
163,170


$
6,415


$
(955
)

$
3,106,909Digital handset and accessory revenues


67,622



54,936



36,443



13,986











172,987Operating revenues

$
1,650,857


$
1,031,601


$
414,822


$
177,156


$
6,415


$
(955
)

$
3,279,896Segment earnings (losses)

$
602,513


$
282,728


$
127,995


$
33,371


$
(125,157
)

$



$
921,450Management fee


(25,169
)














25,200



(31
)


Depreciation and amortization


(148,674
)


(109,489
)


(28,652
)


(15,107
)


(8,882
)


(120
)


(310,924
)Operating income (loss)


428,670



173,239



99,343



18,264



(108,839
)


(151
)


610,526Interest expense


(47,343
)


(40,609
)


(2,111
)


(104
)


(39,757
)


5,832



(124,092
)Interest income


34,710



4,297



2,246



772



17,131



(5,832
)


53,324Foreign currency transaction gains (losses), net


9,696



(26,280
)


86



(314
)


653



31



(16,128
)Other (expense) income, net


(239
)


(7,319
)


45







(5,273
)






(12,786
)Income (loss) before income tax

$
425,494


$
103,328


$
99,609


$
18,618


$
(136,085
)

$
(120
)

$
510,844Capital expenditures

$
172,465


$
325,142


$
63,103


$
40,744


$
38,968


$



$
640,422Nine Months Ended September 30, 2007Service and other revenues

$
1,280,982


$
574,264


$
293,538


$
128,947


$
2,454


$
(859
)

$
2,279,326Digital handset and accessory revenues


18,093



25,257



24,270



9,201



5







76,826Operating revenues

$
1,299,075


$
599,521


$
317,808


$
138,148


$
2,459


$
(859
)

$
2,356,152Segment earnings (losses)

$
491,556


$
145,575


$
100,877


$
26,019


$
(109,818
)

$



$
654,209Management fee


(29,700
)














29,700







Depreciation and amortization


(106,788
)


(67,734
)


(22,505
)


(15,202
)


(4,983
)


295



(216,917
)Operating income (loss)


355,068



77,841



78,372



10,817



(85,101
)


295



437,292Interest expense


(44,765
)


(22,221
)


(1,904
)


(95
)


(28,403
)


7,796



(89,592
)Interest income


20,948



501



3,417



499



27,471



(7,796
)


45,040Foreign currency transaction gains, net


899



10,041



1,301



371



25







12,637Debt conversion expense


















(26,455
)






(26,455
)Other income (expense), net


2,183



(3,162
)


1,586







(1,593
)






(986
)Income (loss) before income tax

$
334,333


$
63,000


$
82,772


$
11,592


$
(114,056
)

$
295


$
377,936Capital expenditures

$
200,059


$
177,927


$
42,702


$
29,966


$
15,277


$



$
465,931 17




---



##### 



NII
    HOLDINGS, INC. AND SUBSIDIARIES
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Corporate


IntercompanyMexico


Brazil


Argentina


Peru


and other


Eliminations


Consolidated(in thousands)Three Months Ended September 30, 2008Service and other revenues

$
559,134


$
360,081


$
137,258


$
57,531


$
2,411


$
(309
)

$
1,116,106Digital handset and accessory revenues


28,391



20,049



13,048



5,131











66,619Operating revenues

$
587,525


$
380,130


$
150,306


$
62,662


$
2,411


$
(309
)

$
1,182,725Segment earnings (losses)

$
211,033


$
107,480


$
46,178


$
10,741


$
(44,806
)

$



$
330,626Management fee


(8,417
)














8,400



17



Depreciation and amortization


(52,518
)


(40,496
)


(10,297
)


(5,218
)


(3,090
)






(111,619
)Operating income (loss)


150,098



66,984



35,881



5,523



(39,496
)


17



219,007Interest expense


(15,611
)


(14,534
)


(724
)


(68
)


(13,172
)


1,643



(42,466
)Interest income


12,858



1,037



379



154



4,011



(1,643
)


16,796Foreign currency transaction (losses) gains, net


(6,819
)


(51,747
)


2,759



(152
)


(458
)


(17
)


(56,434
)Other (expense) income, net


(80
)


(5,767
)


1







(1,765
)






(7,611
)Income (loss) before income tax

$
140,446


$
(4,027
)

$
38,296


$
5,457


$
(50,880
)

$



$
129,292Capital expenditures

$
45,756


$
105,832


$
22,842


$
18,188


$
12,522


$



$
205,140Three Months Ended September 30, 2007Service and other revenues

$
458,665


$
217,163


$
105,437


$
45,457


$
1,072


$
(308
)

$
827,486Digital handset and accessory revenues


7,445



7,531



8,616



3,320



5







26,917Operating revenues

$
466,110


$
224,694


$
114,053


$
48,777


$
1,077


$
(308
)

$
854,403Segment earnings (losses)

$
180,616


$
51,487


$
37,050


$
8,146


$
(40,639
)

$



$
236,660Management fee


(9,900
)














9,900







Depreciation and amortization


(38,574
)


(25,077
)


(7,637
)


(4,318
)


(1,713
)


98



(77,221
)Operating income (loss)


132,142



26,410



29,413



3,828



(32,452
)


98



159,439Interest expense


(15,453
)


(7,879
)


(780
)


(28
)


(14,068
)


2,598



(35,610
)Interest income


8,039



187



1,380



158



15,192



(2,598
)


22,358Foreign currency transaction (losses) gains, net


(309
)


5,802



995



317



33







6,838Debt conversion expense


















(26,455
)






(26,455
)Other (expense) income, net


(77
)


(1,608
)


9



(1
)


58







(1,619
)Income (loss) before income tax

$
124,342


$
22,912


$
31,017


$
4,274


$
(57,692
)

$
98


$
124,951Capital expenditures

$
43,301


$
50,908


$
16,935


$
6,309


$
7,089


$



$
124,542September 30, 2008Property, plant and equipment, net

$
850,966


$
815,687


$
219,229


$
133,350


$
111,156


$
(287
)

$
2,130,101Identifiable assets

$
2,537,254


$
1,726,804


$
463,930


$
269,754


$
763,767


$
(287
)

$
5,761,222December 31, 2007Property, plant and equipment, net

$
803,393


$
673,462


$
183,889


$
107,532


$
84,972


$
(166
)

$
1,853,082Identifiable assets

$
2,297,580


$
1,540,227


$
444,125


$
231,018


$
923,952


$
(166
)

$
5,436,736  18




---



##### 



NII
    HOLDINGS, INC. AND SUBSIDIARIES
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Note 8.
    Related
    Party Transaction       19




---



##### 



Item 2.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations.  INDEX TO
    MANAGEMENTS DISCUSSION AND ANALYSIS
    OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
   
 Introduction


21Business Overview


21Digital Handsets in Commercial Service


25Critical Accounting Policies and Estimates


25Ratio of Earnings to Fixed Charges


25Reclassifications


26Results of Operations


26a. Consolidated


27b. Nextel Mexico


34c. Nextel Brazil


38d. Nextel Argentina


42e. Nextel Peru


45f. Corporate and other


48Liquidity and Capital Resources


50Future Capital Needs and Resources


51Forward Looking Statements


54Effect of New Accounting Standards


55   20




---



##### 



Introduction    
    our consolidated financial condition and results of operations
    for the nine- and three-month periods ended September 30,
    2008 and 2007; and
    significant factors which we believe could affect our
    prospective financial condition and results of operations.  Form 10-K Form 10-Q
 Business
    Overview  ® tm
    
    mobile telephone service, including advanced calling features
    such as speakerphone, conference calling, voice-mail, call
    forwarding and additional line service;
    Nextel Direct
    Connect®

    service, which allows subscribers anywhere on our network to
    talk to each other instantly, on a push-to-talk
    basis, private one-to-one call or group call;
    International Direct
    Connect®

    service, together with Sprint Nextel Corporation and
    TELUS Corporation, which allows subscribers to communicate
    instantly across national borders with our subscribers in
    Mexico, Brazil, Argentina, Peru and Chile, with Sprint Nextel
    Corporation subscribers using compatible handsets in the United
    States and with TELUS subscribers using compatible handsets in
    Canada;
    text messaging services, mobile internet services,
    e-mail
    services including
    Blackberrytm

    services, location-based services, which include the use of
    Global Positioning System (GPS) technologies, digital media
    services and advanced
    Javatm

    enabled business applications; and
    international roaming services.     21




---



##### 



non-U.S. currencies,
      Focusing on Major Business Centers in Key Latin American
    Markets.
  Targeting High Value Customers.
 22




---



##### 



Providing Differentiated Services.
  Delivering Superior Customer Service.
  Selectively Expanding our Service Areas.
  Preserving the iDEN Opportunity.
 23




---



##### 



Planning for the Future.
  Technology Strategy.
       24




---



##### 



Digital
    Handsets in Commercial Service    Mexico


Brazil


Argentina


Peru


Chile


Total(handsets in thousands)Digital handsets in commercial service 
    December 31, 2007


2,140



1,290



812



477



10



4,729Net subscriber additions


445



385



126



143



11



1,110Digital handsets in commercial service 
    September 30, 2008


2,585



1,675



938



620



21



5,839  Critical
    Accounting Policies and Estimates    Form 10-K and/or
  
    revenue recognition;
    allowance for doubtful accounts;
    depreciation of property, plant and equipment;
    amortization of intangible assets;
    asset retirement obligations;
    foreign currency;
    loss contingencies;
    stock-based compensation; and
    income taxes.  Form 10-K
 Ratio of
    Earnings to Fixed Charges  Three MonthsEndedSeptember 30,2008

20073.17x


3.67x
  25




---



##### 




    interest on all indebtedness, amortization of debt financing
    costs and amortization of original issue discount;
    interest capitalized; and
    the portion of rental expense we believe is representative of
    interest. Reclassifications   Results
    of Operations           26




---



##### 



a.
    Consolidated  % of





% ofConsolidated





Consolidated


Change fromSeptember 30,


Operating


September 30,


Operating


Previous Year2008


Revenues


2007


Revenues


Dollars


Percent(dollars in thousands)Nine Months EndedOperating revenuesService and other revenues

$
3,106,909



95
%

$
2,279,326



97
%

$
827,583



36
%Digital handset and accessory revenues


172,987



5
%


76,826



3
%


96,161



125
%3,279,896



100
%


2,356,152



100
%


923,744



39
%Cost of revenuesCost of service (exclusive of depreciation and amortization
    included below)


(848,557
)


(26
)%


(609,827
)


(27
)%


(238,730
)


39
%Cost of digital handsets and accessories


(455,876
)


(14
)%


(320,608
)


(13
)%


(135,268
)


42
%(1,304,433
)


(40
)%


(930,435
)


(40
)%


(374,008
)


40
%Selling and marketing expenses


(435,077
)


(13
)%


(312,380
)


(13
)%


(122,697
)


39
%General and administrative expenses


(618,936
)


(19
)%


(459,128
)


(20
)%


(159,808
)


35
%Depreciation and amortization


(310,924
)


(9
)%


(216,917
)


(9
)%


(94,007
)


43
%Operating income


610,526



19
%


437,292



18
%


173,234



40
%Interest expense, net


(124,092
)


(4
)%


(89,592
)


(4
)%


(34,500
)


39
%Interest income


53,324



2
%


45,040



2
%


8,284



18
%Foreign currency transaction (losses) gains, net


(16,128
)


(1
)%


12,637



1
%


(28,765
)


(228
)%Debt conversion expense










(26,455
)


(1
)%


26,455



(100
)%Other expense, net


(12,786
)






(986
)






(11,800
)


NMIncome before income tax provision


510,844



16
%


377,936



16
%


132,908



35
%Income tax provision


(150,215
)


(5
)%


(128,026
)


(5
)%


(22,189
)


17
%Net income

$
360,629



11
%

$
249,910



11
%

$
110,719



44
% 27




---



##### 



% of





% ofConsolidated





Consolidated


Change fromSeptember 30,


Operating


September 30,


Operating


Previous Year2008


Revenues


2007


Revenues


Dollars


Percent(dollars in thousands)Three Months EndedOperating revenuesService and other revenues

$
1,116,106



94
%

$
827,486



97
%

$
288,620



35
%Digital handset and accessory revenues


66,619



6
%


26,917



3
%


39,702



147
%1,182,725



100
%


854,403



100
%


328,322



38
%Cost of revenuesCost of service (exclusive of depreciation and amortization
    included below)


(305,565
)


(26
)%


(223,617
)


(27
)%


(81,948
)


37
%Cost of digital handsets and accessories


(162,478
)


(14
)%


(112,066
)


(12
)%


(50,412
)


45
%(468,043
)


(40
)%


(335,683
)


(39
)%


(132,360
)


39
%Selling and marketing expenses


(158,103
)


(13
)%


(115,602
)


(14
)%


(42,501
)


37
%General and administrative expenses


(225,953
)


(19
)%


(166,458
)


(19
)%


(59,495
)


36
%Depreciation and amortization


(111,619
)


(9
)%


(77,221
)


(9
)%


(34,398
)


45
%Operating income


219,007



19
%


159,439



19
%


59,568



37
%Interest expense, net


(42,466
)


(3
)%


(35,610
)


(4
)%


(6,856
)


19
%Interest income


16,796



1
%


22,358



2
%


(5,562
)


(25
)%Foreign currency transaction (losses) gains, net


(56,434
)


(5
)%


6,838



1
%


(63,272
)


NMDebt conversion expense










(26,455
)


(3
)%


26,455



(100
)%Other expense, net


(7,611
)


(1
)%


(1,619
)






(5,992
)


NMIncome before income tax provision


129,292



11
%


124,951



15
%


4,341



3
%Income tax provision


(37,506
)


(3
)%


(43,285
)


(5
)%


5,779



(13
)%Net income

$
91,786



8
%

$
81,666



10
%

$
10,120



12
%     NM-Not Meaningful
     28




---



##### 



1.
    Operating
    revenues      2.
    Cost of
    revenues    
    $115.3 million, or 35%, and $39.2 million, or 33%,
    increases in consolidated interconnect costs resulting from 24%
    and 25% increases in consolidated interconnect minutes of use
    and an increase, primarily in Brazil, in the proportion of
    mobile-to-mobile minutes of use, which generally have higher per
    minute interconnection costs;
    $56.9 million, or 30%, and $20.5 million, or 30%,
    increases in consolidated direct switch and transmitter and
    receiver site costs resulting from a 19% increase in the total
    number of sites in service from September 30, 2007 to
    September 30, 2008, as well as increased operating and
    maintenance costs per site for new and existing sites; and
    $41.7 million, or 62%, and $14.8 million, or 60%,
    increases in consolidated service and repair costs mainly
    resulting from 35% and 28% increases in the number of
    subscribers participating under our handset maintenance
    programs, as well as higher costs per handset serviced.   29




---



##### 



3.
    Selling and
    marketing expenses    
    $55.9 million, or 45%, and $14.7 million, or 31%,
    increases in consolidated indirect commissions resulting from
    34% and 35% increases in total gross subscriber additions
    generated through external sales channels and increased
    commission rates in Mexico;
    $46.2 million, or 41%, and $16.5 million, or 40%,
    increases in consolidated payroll expenses and direct
    commissions resulting from 30% increases in total gross
    subscriber additions generated by internal sales personnel over
    both periods, as well as higher payroll and related costs due to
    increases in selling and marketing personnel necessary to
    support continued sales growth; and
    $17.5 million, or 28%, and $10.4 million, or 46%,
    increases in consolidated advertising expenses, primarily in
    Mexico and Brazil, mainly related to the launch of new markets
    in connection with our expansion plan and increased advertising
    initiatives related to overall subscriber growth.  4.
    General and
    administrative expenses    
    $55.0 million, or 46%, and $20.7 million, or 47%,
    increases in consolidated customer care expenses, mainly payroll
    and related expenses, resulting from additional customer care
    personnel necessary to support a larger customer base, as well
    as increased salaries;
    $34.9 million, or 16%, and $12.9 million, or 17%,
    increases in general corporate costs largely due to higher
    personnel costs related to increases in headcount and higher
    facilities-related expenses due to continued subscriber growth
    and expansion into new areas;
    $27.5 million, or 83%, and $10.1 million, or 89%,
    increases in consolidated bad debt expense, primarily as a
    result of the 39% and 38% increases in consolidated operating
    revenues and a decrease in collection rates in Mexico. As a
    result, bad debt expense as a percentage of revenue increased
    from 1.4% for the nine months ended September 30, 2007 to
    1.9% for the same period in 2008 and from 1.3% for the third
    quarter of 2007 to 1.8% for the third quarter of 2008;
    $24.0 million, or 72%, and $8.4 million, or 67%,
    increases in revenue-based taxes in Brazil that we report on a
    gross basis as both service and other revenues and general and
    administrative expenses; and
    $15.4 million, or 37%, and $7.0 million, or 47%,
    increases in information technology expenses primarily related
    to higher payroll and related expenses, increased expenses
    related to the implementation of new billing systems and
    increased maintenance costs.  5.
    Depreciation
    and amortization   30




---



##### 



6.
    Interest
    expense, net    
    $17.6 million and $6.4 million increases in interest
    incurred on our towers financing transactions and capital lease
    obligations in Mexico and Brazil from the nine and three months
    ended September 30, 2007 to the same periods in 2008
    primarily due to increases in both the number of towers financed
    and capital leases;
    a $15.6 million increase in interest expense from the nine
    months ended September 30, 2007 to the same period in 2008
    due to the issuance of our 3.125% convertible notes during the
    second quarter of 2007, partially offset by a $4.8 million
    decrease in interest expense over the same period due to the
    conversion of our 2.875% convertible notes in the third quarter
    of 2007; and
    $11.1 million and $3.8 million in interest incurred on
    borrowings under Nextel Brazils syndicated loan facility
    that were funded between October 2007 and March 2008, partially
    offset by $3.4 million and $1.5 million decreases in
    interest expense due to a principal payment made by Nextel
    Mexico on its syndicated loan facility in April 2008.  7.
    Foreign
    currency transaction (losses) gains, net      8.
    Debt
    conversion expense    9.
    Income tax
    provision     31




---



##### 



Segment
    Results
    % ofConsolidated% of





% of


Selling,


Selling,Consolidated





Consolidated


General and


General and


SegmentNine Months Ended

Operating


Operating


Cost of


Cost of


Administrative


Administrative


EarningsSeptember 30, 2008

Revenues


Revenues


Revenues


Revenues


Expenses


Expenses


(Losses)(dollars in thousands)Nextel Mexico

$
1,650,857



50
%

$
(588,468
)


45
%

$
(459,876
)


44
%

$
602,513Nextel Brazil


1,031,601



31
%


(431,342
)


33
%


(317,531
)


30
%


282,728Nextel Argentina


414,822



13
%


(188,239
)


14
%


(98,588
)


9
%


127,995Nextel Peru


177,156



6
%


(91,099
)


7
%


(52,686
)


5
%


33,371Corporate and other


6,415







(6,240
)


1
%


(125,332
)


12
%


(125,157
)Intercompany eliminations


(955
)






955















Total consolidated

$
3,279,896



100
%

$
(1,304,433
)


100
%

$
(1,054,013
)


100
%   % ofConsolidated% of





% of


Selling,


Selling,Consolidated





Consolidated


General and


General and


SegmentThree Months Ended

Operating


Operating


Cost of


Cost of


Administrative


Administrative


EarningsSeptember 30, 2008

Revenues


Revenues


Revenues


Revenues


Expenses


Expenses


(Losses)(dollars in thousands)Nextel Mexico

$
587,525



50
%

$
(211,838
)


45
%

$
(164,654
)


43
%

$
211,033Nextel Brazil


380,130



32
%


(154,032
)


33
%


(118,618
)


31
%


107,480Nextel Argentina


150,306



13
%


(67,523
)


14
%


(36,605
)


9
%


46,178Nextel Peru


62,662



5
%


(32,604
)


7
%


(19,317
)


5
%


10,741Corporate and other


2,411







(2,355
)


1
%


(44,862
)


12
%


(44,806
)Intercompany eliminations


(309
)






309















Total consolidated

$
1,182,725



100
%

$
(468,043
)


100
%

$
(384,056
)


100
%   % ofConsolidated% of





% of


Selling,


Selling,Consolidated





Consolidated


General and


General and


SegmentNine Months Ended

Operating


Operating


Cost of


Cost of


Administrative


Administrative


EarningsSeptember 30, 2007

Revenues


Revenues


Revenues


Revenues


Expenses


Expenses


(Losses)(dollars in thousands)Nextel Mexico

$
1,299,075



55
%

$
(453,836
)


49
%

$
(353,683
)


46
%

$
491,556Nextel Brazil


599,521



25
%


(254,211
)


27
%


(199,735
)


26
%


145,575Nextel Argentina


317,808



14
%


(147,746
)


16
%


(69,185
)


9
%


100,877Nextel Peru


138,148



6
%


(72,856
)


8
%


(39,273
)


5
%


26,019Corporate and other


2,459







(2,645
)






(109,632
)


14
%


(109,818
)Intercompany eliminations


(859
)






859















Total consolidated

$
2,356,152



100
%

$
(930,435
)


100
%

$
(771,508
)


100
%  32




---



##### 



% ofConsolidated% of





% of


Selling,


Selling,Consolidated





Consolidated


General and


General and


SegmentThree Months Ended

Operating


Operating


Cost of


Cost of


Administrative


Administrative


EarningsSeptember 30, 2007

Revenues


Revenues


Revenues


Revenues


Expenses


Expenses


(Losses)(dollars in thousands)Nextel Mexico

$
466,110



55
%

$
(160,147
)


48
%

$
(125,347
)


45
%

$
180,616Nextel Brazil


224,694



26
%


(95,961
)


28
%


(77,246
)


27
%


51,487Nextel Argentina


114,053



13
%


(52,472
)


16
%


(24,531
)


9
%


37,050Nextel Peru


48,777



6
%


(26,390
)


8
%


(14,241
)


5
%


8,146Corporate and other


1,077







(1,021
)






(40,695
)


14
%


(40,639
)Intercompany eliminations


(308
)






308















Total consolidated

$
854,403



100
%

$
(335,683
)


100
%

$
(282,060
)


100
%     Nine Months Ended September 30,2008


2007


Percent ChangeMexican peso


10.52



10.95



4
%Brazilian real


1.69



2.00



19
%Argentine peso


3.11



3.11



   Three Months Ended September 30,2008


2007


Percent ChangeMexican peso


10.31



10.96



6
%Brazilian real


1.67



1.92



15
%Argentine peso


3.04



3.14



3
%    33




---



##### 



b.
    Nextel
    Mexico  % of





% ofNextel





NextelMexicos





Mexicos


Change fromSeptember 30,


Operating


September 30,


Operating


Previous Year2008


Revenues


2007


Revenues


Dollars


Percent(dollars in thousands)Nine Months EndedOperating revenuesService and other revenues

$
1,583,235



96
%

$
1,280,982



99
%

$
302,253



24
%Digital handset and accessory revenues


67,622



4
%


18,093



1
%


49,529



274
%1,650,857



100
%


1,299,075



100
%


351,782



27
%Cost of revenuesCost of service (exclusive of depreciation and amortization
    included below)


(308,858
)


(19
)%


(251,656
)


(19
)%


(57,202
)


23
%Cost of digital handsets and accessories


(279,610
)


(17
)%


(202,180
)


(16
)%


(77,430
)


38
%(588,468
)


(36
)%


(453,836
)


(35
)%


(134,632
)


30
%Selling and marketing expenses


(243,927
)


(15
)%


(184,160
)


(14
)%


(59,767
)


32
%General and administrative expenses


(215,949
)


(13
)%


(169,523
)


(13
)%


(46,426
)


27
%Segment earnings


602,513



36
%


491,556



38
%


110,957



23
%Management fee


(25,169
)


(1
)%


(29,700
)


(2
)%


4,531



(15
)%Depreciation and amortization


(148,674
)


(9
)%


(106,788
)


(9
)%


(41,886
)


39
%Operating income


428,670



26
%


355,068



27
%


73,602



21
%Interest expense, net


(47,343
)


(3
)%


(44,765
)


(3
)%


(2,578
)


6
%Interest income


34,710



2
%


20,948



2
%


13,762



66
%Foreign currency transaction gains, net


9,696



1
%


899







8,797



NMOther (expense) income, net


(239
)






2,183







(2,422
)


(111
)%Income before income tax

$
425,494



26
%

$
334,333



26
%

$
91,161



27
%Three Months EndedOperating revenuesService and other revenues

$
559,134



95
%

$
458,665



98
%

$
100,469



22
%Digital handset and accessory revenues


28,391



5
%


7,445



2
%


20,946



281
%587,525



100
%


466,110



100
%


121,415



26
%Cost of revenuesCost of service (exclusive of depreciation and amortization
    included below)


(109,826
)


(19
)%


(91,541
)


(19
)%


(18,285
)


20
%Cost of digital handsets and accessories


(102,012
)


(17
)%


(68,606
)


(15
)%


(33,406
)


49
%(211,838
)


(36
)%


(160,147
)


(34
)%


(51,691
)


32
%Selling and marketing expenses


(87,471
)


(15
)%


(66,200
)


(14
)%


(21,271
)


32
%General and administrative expenses


(77,183
)


(13
)%


(59,147
)


(13
)%


(18,036
)


30
%Segment earnings


211,033



36
%


180,616



39
%


30,417



17
%Management fee


(8,417
)


(1
)%


(9,900
)


(2
)%


1,483



(15
)%Depreciation and amortization


(52,518
)


(9
)%


(38,574
)


(9
)%


(13,944
)


36
%Operating income


150,098



26
%


132,142



28
%


17,956



14
%Interest expense, net


(15,611
)


(3
)%


(15,453
)


(3
)%


(158
)


1
%Interest income


12,858



2
%


8,039



2
%


4,819



60
%Foreign currency transaction losses, net


(6,819
)


(1
)%


(309
)






(6,510
)


NMOther expense, net


(80
)






(77
)






(3
)


4
%Income before income tax

$
140,446



24
%

$
124,342



27
%

$
16,104



13
%     NM-Not Meaningful
 34




---



##### 



35




---



##### 



1.
    Operating
    revenues    
    33% and 31% increases in the average number of digital handsets
    in service resulting from growth in Nextel Mexicos
    existing markets, as well as the expansion of service coverage
    into new markets launched in the second half of 2007 and in
    2008; and
    $20.8 million, or 38%, and $7.0 million, or 34%,
    increases in revenues generated from Nextel Mexicos
    handset maintenance program as a result of increases in the
    number of subscribers participating in this program.      2.
    Cost of
    revenues    
    $17.7 million, or 13%, and $5.6 million, or 12%,
    increases in interconnect costs, largely as a result of 13% and
    12% increases in interconnect system minutes of use;
    $17.0 million, or 19%, and $6.4 million, or 20%,
    increases in direct switch and transmitter and receiver site
    costs resulting from a 10% increase in the number of sites in
    service from September 30, 2007 to September 30, 2008,
    as well as increased operating and maintenance costs per site
    for new and existing sites;
    $9.1 million, or 45%, and $2.2 million, or 29%,
    increases in service and repair costs largely due increased
    costs of repairs as well as a 20% increase in the number of
    subscribers participating in Nextel Mexicos handset
    maintenance program; and
    $8.4 million and $3.0 million increases in facilities
    and administrative costs largely due to higher product support
    costs.    3.
    Selling and
    marketing expenses    
    $37.7 million, or 44%, and $8.4 million, or 26%,
    increases in indirect commissions, primarily due to 30% and 34%
    increases in gross subscriber additions generated by Nextel
    Mexicos external sales channels, as well as increased
    commission rates that Nextel Mexico implemented during the third
    quarter of 2007;
    $16.2 million, or 30%, and $6.1 million, or 32%,
    increases in direct commissions and payroll expenses,
    principally due to 26% and 25% increases in gross subscriber
    additions generated by Nextel Mexicos internal sales
    personnel, as well as an increase in average direct commission
    earned per handset sale; and
    $5.8 million, or 16%, and $6.9 million, or 57%,
    increases in advertising costs resulting from the launch of new
    rate plans, as well as an increase in advertising expenses
    during the third quarter of 2008 designed specifically to
    increase the market awareness of the Nextel brand name in Mexico. 36




---



##### 



4.
    General and
    administrative expenses    
    $20.3 million, or 103%, and $7.6 million, or 113%,
    increases in bad debt expense, which increased as percentages of
    revenue from 1.5% and 1.4% for the nine and three months ended
    September 30, 2007 to 2.4% for the nine and three months
    ended September 30, 2008, primarily due to a decrease in
    customer collections from new subscribers that have higher
    credit risk;
    $19.1 million, or 31%, and $7.3 million, or 33%,
    increases in customer care expenses primarily due to increases
    in payroll and employee related expenses which were caused by
    27% and 24% increases in customer care personnel necessary to
    support a growing customer base; and
    $4.4 million, or 30%, and $1.9 million, or 36%,
    increases in information technology expenses resulting from
    increases in systems maintenance expenses, as well as increases
    in payroll and related expenses caused by more information
    technology personnel.  5.
    Depreciation
    and amortization    6.
    Interest
    income    7.
    Foreign
    currency transaction gains (losses), net     37




---



##### 



c.
    Nextel
    Brazil  % of





% ofNextel





NextelBrazils





Brazils


Change fromSeptember 30,


Operating


September 30,


Operating


Previous Year2008


Revenues


2007


Revenues


Dollars


Percent(dollars in thousands)Nine Months EndedOperating revenuesService and other revenues

$
976,665



95
%

$
574,264



96
%

$
402,401



70
%Digital handset and accessory revenues


54,936



5
%


25,257



4
%


29,679



118
%1,031,601



100
%


599,521



100
%


432,080



72
%Cost of revenuesCost of service (exclusive of depreciation and amortization
    included below)


(344,258
)


(33
)%


(197,099
)


(33
)%


(147,159
)


75
%Cost of digital handsets and accessories


(87,084
)


(9
)%


(57,112
)


(10
)%


(29,972
)


52
%(431,342
)


(42
)%


(254,211
)


(43
)%


(177,131
)


70
%Selling and marketing expenses


(125,633
)


(12
)%


(81,976
)


(13
)%


(43,657
)


53
%General and administrative expenses


(191,898
)


(19
)%


(117,759
)


(20
)%


(74,139
)


63
%Segment earnings


282,728



27
%


145,575



24
%


137,153



94
%Depreciation and amortization


(109,489
)


(10
)%


(67,734
)


(11
)%


(41,755
)


62
%Operating income


173,239



17
%


77,841



13
%


95,398



123
%Interest expense, net


(40,609
)


(4
)%


(22,221
)


(4
)%


(18,388
)


83
%Interest income


4,297



1
%


501







3,796



NMForeign currency transaction (losses) gains, net


(26,280
)


(3
)%


10,041



2
%


(36,321
)


NMOther expense, net


(7,319
)


(1
)%


(3,162
)






(4,157
)


131
%Income before income tax

$
103,328



10
%

$
63,000



11
%

$
40,328



64
%Three Months EndedOperating revenuesService and other revenues

$
360,081



95
%

$
217,163



97
%

$
142,918



66
%Digital handset and accessory revenues


20,049



5
%


7,531



3
%


12,518



166
%380,130



100
%


224,694



100
%


155,436



69
%Cost of revenuesCost of service (exclusive of depreciation and amortization
    included below)


(125,677
)


(33
)%


(74,696
)


(34
)%


(50,981
)


68
%Cost of digital handsets and accessories


(28,355
)


(8
)%


(21,265
)


(9
)%


(7,090
)


33
%(154,032
)


(41
)%


(95,961
)


(43
)%


(58,071
)


61
%Selling and marketing expenses


(46,703
)


(12
)%


(32,356
)


(14
)%


(14,347
)


44
%General and administrative expenses


(71,915
)


(19
)%


(44,890
)


(20
)%


(27,025
)


60
%Segment earnings


107,480



28
%


51,487



23
%


55,993



109
%Depreciation and amortization


(40,496
)


(10
)%


(25,077
)


(11
)%


(15,419
)


61
%Operating income


66,984



18
%


26,410



12
%


40,574



154
%Interest expense, net


(14,534
)


(4
)%


(7,879
)


(4
)%


(6,655
)


84
%Interest income


1,037







187







850



NMForeign currency transaction (losses) gains, net


(51,747
)


(14
)%


5,802



3
%


(57,549
)


NMOther expense, net


(5,767
)


(1
)%


(1,608
)


(1
)%


(4,159
)


259
%(Loss) income before income tax

$
(4,027
)


(1
)%

$
22,912



10
%

$
(26,939
)


(118
)%     NM-Not Meaningful
 38




---



##### 



1.
    Operating
    revenues    
    42% and 41% increases in the average number of digital handsets
    in service resulting from growth in Nextel Brazils
    existing markets and the expansion of service coverage into new
    markets in connection with its balanced growth and expansion
    objectives;
    19% and 15% appreciation of the Brazilian real relative to the
    U.S. dollar during those periods;
    $27.5 million, or 68%, and $9.4 million, or 62%,
    increases in revenues generated from Nextel Brazils
    handset maintenance program as a result of 53% and 63% increases
    in the number of subscribers participating in this
    program; and
    slight increases in local currency-based average revenue per
    subscriber.    2.
    Cost of
    revenues    
    $85.6 million, or 81%, and $28.8 million, or 69%,
    increases in interconnect costs resulting from 53% and 57%
    increases in interconnect minutes of use over both periods, as
    well as increases in per minute costs due to increased rates by
    fixed carriers;
    $30.7 million, or 46%, and $10.6 million, or 44%,
    increases in direct switch and transmitter and receiver site
    costs resulting from a 30% increase in the number of sites in
    service from September 30, 2007 to September 30,
    2008; and 39




---



##### 




    $24.2 million, or 160%, and $9.5 million, or 184%,
    increases in service and repair costs largely due to 53% and 63%
    increases in the number of subscribers participating in Nextel
    Brazils handset maintenance program and increased costs of
    repairs related to a change in the mix of handsets.      3.
    Selling and
    marketing expenses    
    $21.2 million, or 57%, and $7.7 million, or 56%,
    increases in payroll and direct commissions largely as a result
    of 43% and 52% increases in gross subscriber additions generated
    by Nextel Brazils internal sales force and higher payroll
    and related costs related to increases in selling and marketing
    personnel necessary to support continued sales growth;
    $11.1 million, or 55%, and $2.4 million, or 26%,
    increases in advertising expenses resulting from the launch of
    new markets in connection with Nextel Brazils expansion
    plan, its continued print and media campaigns for various
    products and services, consistent with Nextel Brazils
    growth objectives and its sponsorship of the Copa Nextel Stock
    Car races, a professional racecar event; and
    $9.6 million, or 44%, and $3.8 million, or 44%,
    increases in indirect commissions resulting from 28% and 30%
    increases in gross subscriber additions generated through Nextel
    Brazils external sales channels.    4.
    General and
    administrative expenses    
    $26.3 million, or 76%, and $9.9 million, or 74%,
    increases in customer care expenses resulting from 41% and 40%
    increases in customer care personnel necessary to support a
    larger customer base, as well as increases in the number of
    stores;
    $24.0 million, or 72%, and $8.4 million, or 67%,
    increases in revenue-based taxes that we report on a gross basis
    as both service and other revenues and general and
    administrative expenses, primarily due to the 70% and 66%
    increases in Nextel Brazils service and other revenues;
    $12.1 million, or 41%, and $5.2 million, or 46%,
    increases in general corporate costs primarily resulting from
    18% and 19% increases in general and administrative personnel
    necessary to support Nextel Brazils expansion, as well as
    increases in facilities costs due to expansion into new markets;
    $6.2 million, or 65%, and $1.7 million, or 46%,
    increases in bad debt expense as a result of the 72% and 69%
    increases in Nextel Brazils operating revenues. Bad debt
    expense as a percentage of consolidated operating revenues
    decreased slightly from 1.6% for the nine months ended
    September 30, 2007 to 1.5% for the nine months ended
    September 30, 2008 and from 1.6% for the third quarter of
    2007 to 1.4% for the third quarter of 2008; and
    $5.6 million, or 55%, and $1.9 million, or 50%,
    increases in information technology expenses related to the
    expansion of Nextel Brazils network and systems
    maintenance expenses. 40




---



##### 



5.
    Depreciation
    and amortization    6.
    Interest
    expense, net    7.
    Foreign
    currency transaction (losses) gains, net     41




---



##### 



d.
    Nextel
    Argentina  % of





% ofNextel





NextelArgentinas





Argentinas


Change fromSeptember 30,


Operating


September 30,


Operating


Previous Year2008


Revenues


2007


Revenues


Dollars


Percent(dollars in thousands)Nine Months EndedOperating revenuesService and other revenues

$
378,379



91
%

$
293,538



92
%

$
84,841



29
%Digital handset and accessory revenues


36,443



9
%


24,270



8
%


12,173



50
%414,822



100
%


317,808



100
%


97,014



31
%Cost of revenuesCost of service (exclusive of depreciation and amortization
    included below)


(132,825
)


(32
)%


(109,815
)


(34
)%


(23,010
)


21
%Cost of digital handsets and accessories


(55,414
)


(13
)%


(37,931
)


(12
)%


(17,483
)


46
%(188,239
)


(45
)%


(147,746
)


(46
)%


(40,493
)


27
%Selling and marketing expenses


(34,072
)


(8
)%


(24,128
)


(8
)%


(9,944
)


41
%General and administrative expenses


(64,516
)


(16
)%


(45,057
)


(14
)%


(19,459
)


43
%Segment earnings


127,995



31
%


100,877



32
%


27,118



27
%Depreciation and amortization


(28,652
)


(7
)%


(22,505
)


(7
)%


(6,147
)


27
%Operating income


99,343



24
%


78,372



25
%


20,971



27
%Interest expense, net


(2,111
)


(1
)%


(1,904
)






(207
)


11
%Interest income


2,246



1
%


3,417



1
%


(1,171
)


(34
)%Foreign currency transaction gains, net


86







1,301







(1,215
)


(93
)%Other income, net


45







1,586







(1,541
)


(97
)%Income before income tax

$
99,609



24
%

$
82,772



26
%

$
16,837



20
%Three Months EndedOperating revenuesService and other revenues

$
137,258



91
%

$
105,437



92
%

$
31,821



30
%Digital handset and accessory revenues


13,048



9
%


8,616



8
%


4,432



51
%150,306



100
%


114,053



100
%


36,253



32
%Cost of revenuesCost of service (exclusive of depreciation and amortization
    included below)


(47,538
)


(32
)%


(39,271
)


(34
)%


(8,267
)


21
%Cost of digital handsets and accessories


(19,985
)


(13
)%


(13,201
)


(12
)%


(6,784
)


51
%(67,523
)


(45
)%


(52,472
)


(46
)%


(15,051
)


29
%Selling and marketing expenses


(12,920
)


(8
)%


(8,997
)


(8
)%


(3,923
)


44
%General and administrative expenses


(23,685
)


(16
)%


(15,534
)


(14
)%


(8,151
)


52
%Segment earnings


46,178



31
%


37,050



32
%


9,128



25
%Depreciation and amortization


(10,297
)


(7
)%


(7,637
)


(6
)%


(2,660
)


35
%Operating income


35,881



24
%


29,413



26
%


6,468



22
%Interest expense, net


(724
)


(1
)%


(780
)


(1
)%


56



(7
)%Interest income


379







1,380



1
%


(1,001
)


(73
)%Foreign currency transaction gains, net


2,759



2
%


995



1
%


1,764



177
%Other income, net


1







9







(8
)


(89
)%Income before income tax

$
38,296



25
%

$
31,017



27
%

$
7,279



23
%  42




---



##### 



1.
    Operating
    revenues    
    24% and 23% increases in the average number of digital handsets
    in service, resulting mostly from growth in Nextel
    Argentinas existing markets;
    increases in average revenue per subscriber; and
    $11.7 million, or 38%, and $4.0 million, or 35%,
    increases in revenues generated from Nextel Argentinas
    handset maintenance program as a result of 25% and 20% increases
    in the number of subscribers participating in the program and
    increased maintenance program revenue per handset.    2.
    Cost of
    revenues    
    $11.0 million, or 19%, and $4.1 million, or 20%,
    increases in interconnect costs largely as a result of 13% and
    10% increases in interconnect system minutes of use, as well as
    an increase in the proportion of mobile-to-mobile minutes of
    use, which generally have higher per minute costs;
    $4.8 million, or 20%, and $2.0 million, or 24%,
    increases in direct switch and transmitter and receiver site
    costs due to a 23% increase in the number of sites in service
    from September 30, 2007 to September 30, 2008; and
    $4.5 million, or 17%, and $1.2 million, or 12%,
    increases in service and repair costs, largely due to 25% and
    20% increases in the number of subscribers participating in
    Nextel Argentinas handset maintenance program.   43




---



##### 



3.
    Selling and
    marketing expenses    
    $4.7 million, or 42%, and $1.4 million, or 35%,
    increases in indirect commissions, principally resulting from
    25% and 17% increases in gross subscriber additions generated by
    Nextel Argentinas external sales channels, as well as
    increases in indirect commissions earned per subscriber
    addition; and
    $4.4 million, or 52%, and $1.4 million, or 42%,
    increases in payroll and direct commissions, mostly due to 16%
    and 17% increases in gross subscriber additions generated by
    Nextel Argentinas internal sales personnel, as well as
    higher payroll and related costs related to increases in selling
    and marketing personnel necessary to support continued sales
    growth and significant increases in salaries consistent with the
    ongoing inflation that we are experiencing in Argentina.  4.
    General and
    administrative expenses    
    $10.0 million, or 41%, and $4.5 million, or 57%,
    increases in general corporate costs resulting from certain
    revenue-based taxes as well as increases in payroll and related
    expenses caused by increases in general and administrative
    personnel and significant increases in salaries consistent with
    the ongoing inflation that we are experiencing in Argentina;
    $5.8 million, or 50%, and $2.2 million, or 51%,
    increases in customer care expenses resulting from increases in
    customer care personnel necessary to support a larger customer
    base and significant increases in salaries consistent with the
    ongoing inflation that we are experiencing in Argentina; and
    $2.4 million, or 37%, and $0.7 million, or 31%,
    increases in information technology expenses caused by increases
    in information technology personnel, higher software maintenance
    costs and increases in salaries consistent with the ongoing
    inflation that we are experiencing in Argentina.  5.
    Depreciation
    and amortization   44




---



##### 



e.
    Nextel
    Peru % of





% ofNextel





NextelPerus





Perus


Change fromSeptember 30,


Operating


September 30,


Operating


Previous Year2008


Revenues


2007


Revenues


Dollars


Percent(dollars in thousands)Nine Months EndedOperating revenuesService and other revenues

$
163,170



92
%

$
128,947



93
%

$
34,223



27
%Digital handset and accessory revenues


13,986



8
%


9,201



7
%


4,785



52
%177,156



100
%


138,148



100
%


39,008



28
%Cost of revenuesCost of service (exclusive of depreciation and amortization
    included below)


(58,919
)


(33
)%


(50,326
)


(37
)%


(8,593
)


17
%Cost of digital handsets and accessories


(32,180
)


(18
)%


(22,530
)


(16
)%


(9,650
)


43
%(91,099
)


(51
)%


(72,856
)


(53
)%


(18,243
)


25
%Selling and marketing expenses


(22,093
)


(13
)%


(14,905
)


(11
)%


(7,188
)


48
%General and administrative expenses


(30,593
)


(17
)%


(24,368
)


(17
)%


(6,225
)


26
%Segment earnings


33,371



19
%


26,019



19
%


7,352



28
%Depreciation and amortization


(15,107
)


(9
)%


(15,202
)


(11
)%


95



(1
)%Operating income


18,264



10
%


10,817



8
%


7,447



69
%Interest expense, net


(104
)






(95
)






(9
)


9
%Interest income


772



1
%


499







273



55
%Foreign currency transaction (losses) gains, net


(314
)






371







(685
)


(185
)%Income before income tax

$
18,618



11
%

$
11,592



8
%

$
7,026



61
% 45




---



##### 



% of





% ofNextel





NextelPerus





Perus


Change fromSeptember 30,


Operating


September 30,


Operating


Previous Year2008


Revenues


2007


Revenues


Dollars


Percent(dollars in thousands)Three Months EndedOperating revenuesService and other revenues

$
57,531



92
%

$
45,457



93
%

$
12,074



27
%Digital handset and accessory revenues


5,131



8
%


3,320



7
%


1,811



55
%62,662



100
%


48,777



100
%


13,885



28
%Cost of revenuesCost of service (exclusive of depreciation and amortization
    included below)


(21,040
)


(34
)%


(17,691
)


(36
)%


(3,349
)


19
%Cost of digital handsets and accessories


(11,564
)


(18
)%


(8,699
)


(18
)%


(2,865
)


33
%(32,604
)


(52
)%


(26,390
)


(54
)%


(6,214
)


24
%Selling and marketing expenses


(8,264
)


(13
)%


(5,582
)


(11
)%


(2,682
)


48
%General and administrative expenses


(11,053
)


(18
)%


(8,659
)


(18
)%


(2,394
)


28
%Segment earnings


10,741



17
%


8,146



17
%


2,595



32
%Depreciation and amortization


(5,218
)


(8
)%


(4,318
)


(9
)%


(900
)


21
%Operating income


5,523



9
%


3,828



8
%


1,695



44
%Interest expense, net


(68
)






(28
)






(40
)


143
%Interest income


154







158







(4
)


(3
)%Foreign currency transaction (losses) gains, net


(152
)






316



1
%


(468
)


(148
)%Income before income tax

$
5,457



9
%

$
4,274



9
%

$
1,183



28
%       1.
    Operating
    revenues     46




---



##### 



2.
    Cost of
    revenues    
    $3.8 million, or 74%, and $1.7 million, or 94%,
    increases in service and repair costs largely due to 64% and 49%
    increases in the number of subscribers participating in Nextel
    Perus handset maintenance program and increased costs per
    handset serviced; and
    $3.0 million, or 27%, and $1.0 million, or 26%,
    increases in direct switch and transmitter and receiver site
    costs due to a 13% increase in the number of sites in service
    from September 30, 2007 to September 30, 2008, as well
    as increases in operating and maintenance costs per site.    3.
    Selling and
    marketing expenses    
    $3.8 million, or 94%, and $1.1 million, or 68%,
    increases in indirect commissions as a result of 80% and 79%
    increases in handset sales by Nextel Perus external sales
    channels; and
    $3.0 million, or 37%, and $0.9 million, or 31%,
    increases in direct commissions and payroll expenses principally
    due to higher payroll and related costs caused by increases in
    selling and marketing personnel necessary to support continued
    sales growth.  4.
    General and
    administrative expenses    
    $3.1 million, or 36%, and $1.0 million, or 31%,
    increases in customer care expenses, mainly caused by increases
    in customer care and billing operations personnel needed to
    support a growing customer base; and
    $3.1 million, or 36%, and $1.4 million, or 43%,
    increases in general corporate costs resulting from increases in
    payroll and related expenses caused by increases in general and
    administrative personnel necessary to develop Nextel Perus
    new network. 47




---



##### 



f.
    Corporate
    and other  % of





% ofCorporate





Corporateand other





and other


Change fromSeptember 30,


Operating


September 30,


Operating


Previous Year2008


Revenues


2007


Revenues


Dollars


Percent(dollars in thousands)Nine Months EndedOperating revenuesService and other revenues

$
6,415



100
%

$
2,454



100
%

$
3,961



161
%Digital handset and accessory revenues










5







(5
)


(100
)%6,415



100
%


2,459



100
%


3,956



161
%Cost of revenuesCost of service (exclusive of depreciation and amortization
    included below)


(4,652
)


(72
)%


(1,790
)


(73
)%


(2,862
)


160
%Cost of digital handsets and accessories


(1,588
)


(25
)%


(855
)


(35
)%


(733
)


86
%(6,240
)


(97
)%


(2,645
)


(108
)%


(3,595
)


136
%Selling and marketing expenses


(9,352
)


(146
)%


(7,211
)


(293
)%


(2,141
)


30
%General and administrative expenses


(115,980
)


NM



(102,421
)


NM



(13,559
)


13
%Segment losses


(125,157
)


NM



(109,818
)


NM



(15,339
)


14
%Management fee


25,200



NM



29,700



NM



(4,500
)


(15
)%Depreciation and amortization


(8,882
)


(138
)%


(4,983
)


(203
)%


(3,899
)


78
%Operating loss


(108,839
)


NM



(85,101
)


NM



(23,738
)


28
%Interest expense, net


(39,757
)


NM



(28,403
)


NM



(11,354
)


40
%Interest income


17,131



267
%


27,471



NM



(10,340
)


(38
)%Foreign currency transaction gains, net


653



10
%


25



1
%


628



NMDebt conversion expense






NM



(26,455
)


NM



26,455



(100
)%Other expense, net


(5,273
)


(82
)%


(1,593
)


(65
)%


(3,680
)


231
%Loss before income tax

$
(136,085
)


NM


$
(114,056
)


NM


$
(22,029
)


19
% 48




---



##### 



% of





% ofCorporate





Corporateand other





and other


Change fromSeptember 30,


Operating


September 30,


Operating


Previous Year2008


Revenues


2007


Revenues


Dollars


Percent(dollars in thousands)Three Months EndedOperating revenuesService and other revenues

$
2,411



100
%

$
1,072



100
%

$
1,339



125
%Digital handset and accessory revenues










5







(5
)


(100
)%2,411



100
%


1,077



100
%


1,334



124
%Cost of revenuesCost of service (exclusive of depreciation and amortization
    included below)


(1,793
)


(75
)%


(726
)


(68
)%


(1,067
)


147
%Cost of digital handsets and accessories


(562
)


(23
)%


(295
)


(27
)%


(267
)


91
%(2,355
)


(98
)%


(1,021
)


(95
)%


(1,334
)


131
%Selling and marketing expenses


(2,745
)


(114
)%


(2,467
)


(229
)%


(278
)


11
%General and administrative expenses


(42,117
)


NM



(38,228
)


NM



(3,889
)


10
%Segment losses


(44,806
)


NM



(40,639
)


NM



(4,167
)


10
%Management fee


8,400



NM



9,900



NM



(1,500
)


(15
)%Depreciation and amortization


(3,090
)


(128
)%


(1,713
)


(159
)%


(1,377
)


80
%Operating loss


(39,496
)


NM



(32,452
)


NM



(7,044
)


22
%Interest expense, net


(13,172
)


NM



(14,068
)


NM



896



(6
)%Interest income


4,011



166
%


15,192



NM



(11,181
)


(74
)%Foreign currency transaction (losses) gains, net


(458
)


(19
)%


33



3
%


(491
)


NMDebt conversion expense






NM



(26,455
)


NM



26,455



(100
)%Other (expense) income, net


(1,765
)


(73
)%


58



5
%


(1,823
)


NMLoss before income tax

$
(50,880
)


NM


$
(57,692
)


NM


$
6,812



(12
)%     NM-Not Meaningful
  start-up
  1.
    General and
    administrative expenses     49




---



##### 



2.
    Interest
    expense, net    3.
    Interest
    income    4.
    Debt
    conversion expense    5.
    Other
    (expense) income, net   Liquidity
    and Capital Resources         50




---



##### 



Cash
    Flows
  Nine Months EndedSeptember 30,2008


2007


ChangeNet cash provided by operating activities

$
616,650


$
455,195


$
161,455Net cash used in investing activities


(512,639
)


(554,619
)


41,980Net cash (used in) provided by financing activities


(81,894
)


936,587



(1,018,481
)Effect of exchange rate changes on cash and cash equivalents


1,232



(351
)


1,583Net increase in cash and cash equivalents


23,349



836,812



(813,463
)Cash and cash equivalents, beginning of period


1,370,165



708,591



661,574Cash and cash equivalents, end of period

$
1,393,514


$
1,545,403


$
(151,889
)        Future
    Capital Needs and Resources  Capital Resources.
    
    the amount of revenue we are able to generate and collect from
    our customers;
    the amount of operating expenses required to provide our
    services;
    the cost of acquiring and retaining customers, including the
    subsidies we incur to provide handsets to both our new and
    existing customers;
    our ability to continue to increase the size of our subscriber
    base; and
    fluctuations in foreign exchange rates. 51




---



##### 



Capital Needs and Contractual
    Obligations.
  
    operating expenses relating to our networks;
    capital expenditures to expand and enhance our networks, as
    discussed below under Capital Expenditures;
    operating and capital expenditures related to the deployment of
    a next generation network in Peru;
    future spectrum or other related purchases;
    debt service requirements, including tower financing and capital
    lease obligations;
    cash taxes; and
    other general corporate expenditures.    Payments due by periodLess than








More thanContractual Obligations

1 Year


1-3 Years


3-5 Years


5 Years


Total(in thousands)Convertible notes(1)

$
47,125


$
94,250


$
1,256,750


$
465,523


$
1,863,648Tower financing obligations(1)


58,274



116,500



116,417



337,562



628,753Syndicated loan facilities(2)


114,323



392,213



115,037



10,783



632,356Capital lease obligations(3)


13,940



27,872



43,311



86,151



171,274Spectrum fees(4)


14,258



28,516



28,516



170,452



241,742Operating leases(5)


128,109



207,917



140,441



180,629



657,096Purchase obligations(6)


754,743



73,175



8,831



5,254



842,003Other long-term obligations(7)


19,643



20,076



41,447



201,436



282,602Total contractual commitments

$
1,150,415


$
960,519


$
1,750,750


$
1,457,790


$
5,319,474     (1)
    
    These amounts include estimated principal and interest payments
    over the full term of the obligation based on our expectations
    as to future interest rates, assuming the current payment
    schedule. The $350.0 million repayment of the principal
    balance of our 2.75% convertible notes due 2025 is included in
    the table above in the column labeled more than
    5 years. However, in accordance with the terms of
    these notes, if the notes are not converted, the noteholders
    have the right to require us to repurchase the notes in August
    2010 at a repurchase price equal to 100% of their principal
    amount plus accrued and unpaid interest.(2)
    
    These amounts include principal and interest payments associated
    with Nextel Mexico and Nextel Brazils syndicated loan
    facilities.(3)
    
    These amounts represent principal and interest payments due
    under our co-location agreements, including with American Tower,
    and our existing corporate aircraft lease. The amounts related
    to our existing aircraft lease exclude amounts that are
    contingently due in the event of our default under the lease,
    but do include remaining amounts due under the letter of credit
    provided for our new corporate aircraft.(4)
    
    These amounts do not include variable fees based on certain
    operating revenues and are subject to increases in the Mexican
    Consumer Pricing Index.(5)
    
    These amounts principally include future lease costs related to
    our transmitter and receiver sites and switches and office
    facilities. 52




---



##### 



(6)
    
    These amounts include maximum contractual purchase obligations
    under various agreements with our vendors, as well as estimated
    amounts related to interconnection agreements in Mexico.(7)
    
    These amounts include our current estimates of asset retirement
    obligations based on our expectations as to future retirement
    costs, inflation rates and timing of retirements, as well as
    amounts related to our FIN 48 liabilities.    Capital Expenditures.
  
    the expansion of the coverage of our networks to new market
    areas;
    the construction of additional transmitter and receiver sites to
    increase system capacity and maintain system quality and the
    installation of related switching equipment in some of our
    existing market coverage areas;
    the enhancement of our network coverage around some major market
    areas;
    the deployment within required timeframes of a next generation
    network that utilizes the 1.9 GHz spectrum that we acquired
    in Peru in 2007;
    potential funding of future spectrum acquisitions and
    development and deployment of any future next generation
    networks; and
    non-network
    related information technology projects.    Future Outlook.
 53




---



##### 




    cash and cash equivalents on hand and short-term-investments
    available to fund our operations;
    expected cash flows from operations;
    the anticipated level of capital expenditures, including minimum
    build-out requirements, relating to the deployment of the next
    generation network that utilizes the 1.9 GHz spectrum we
    acquired in Peru;
    our scheduled debt service; and
    income taxes.    
    if our business plans change, including as a result of changes
    in technology;
    if we decide to expand into new markets or further in our
    existing markets, as a result of the construction of additional
    portions of our networks or the acquisition of competitors or
    others;
    if we are successful in winning spectrum in auctions;
    if currency values in our markets significantly depreciate in
    value against the U.S. dollar;
    if economic conditions in any of our markets change generally;
    if competitive practices in the mobile wireless
    telecommunications industry change materially from those
    currently prevailing or from those now anticipated; or
    if other presently unexpected circumstances arise that have a
    material effect on the cash flow or profitability of our mobile
    wireless business.      
    the commercial success of our operations;
    the volatility and demand of the capital markets; and
    the future market prices of our securities.   Forward
    Looking Statements  Safe Harbor Statement under the Private
    Securities Litigation Reform Act of
    1995. Form 10-Q
 54




---



##### 




    our ability to meet the operating goals established by our
    business plan;
    general economic conditions in the United States or in Latin
    America and in the market segments that we are targeting for our
    services;
    the political and social conditions in the countries in which we
    operate, including political instability, which may affect the
    economies of our markets and the regulatory schemes in these
    countries;
    the impact of foreign exchange volatility in our markets as
    compared to the U.S. dollar and related currency
    depreciation in countries in which our operating companies
    conduct business;
    our ability to access sufficient debt or equity capital to meet
    any future operating and financial needs;
    reasonable access to and the successful performance of the
    technology being deployed in our service areas, and improvements
    thereon, including technology deployed in connection with the
    introduction of digital two-way mobile data or Internet
    connectivity services in our markets;
    the availability of adequate quantities of system infrastructure
    and subscriber equipment and components at reasonable pricing to
    meet our service deployment and marketing plans and customer
    demand;
    Motorolas ability and willingness to provide handsets and
    related equipment and software applications or to develop new
    technologies or features for us, including the timely
    development and availability of new handsets with expanded
    applications and features;
    the risk of deploying new technologies, including the potential
    need for additional funding to support that deployment, the risk
    that new services supported by the new technology will not
    attract enough subscribers to support the related costs of
    deploying or operating the new technology, the need to
    significantly increase our employee base and the potential
    distraction of management;
    our ability to successfully scale our billing, collection,
    customer care and similar back-office operations to keep pace
    with customer growth, increased system usage rates and growth or
    to successfully deploy new systems that support those functions;
    the success of efforts to improve and satisfactorily address any
    issues relating to our network performance;
    future legislation or regulatory actions relating to our SMR
    services, other wireless communication services or
    telecommunications generally;
    the ability to achieve and maintain market penetration and
    average subscriber revenue levels sufficient to provide
    financial viability to our network business;
    the quality and price of similar or comparable wireless
    communications services offered or to be offered by our
    competitors, including providers of cellular services and
    personal communications services;
    market acceptance of our new service offerings; and
    other risks and uncertainties described in this quarterly report
    on
    Form 10-Q
    and from time to time in our other reports filed with the
    Securities and Exchange Commission, including in our 2007 annual
    report on
    Form 10-K. Effect of
    New Accounting Standards   55




---



##### 



No. 157-1, No. 157-1, No. 157-2, No. 157-2, No. 157-2, non-financial non-financial
         56




---



##### 



No. FAS 142-3, FAS 142-3. FAS 142-3 FAS 142-3 FAS 142-3 FAS 142-3 FAS 142-3
  14-1, 14-1. 14-1 14-1 14-1 14-1
  Item 3.
    Quantitative
    and Qualitative Disclosures About Market Risk.         57




---



##### 



Year of Maturity


September 30, 2008


December 31, 20071 Year


2 Years


3 Years


4 Years


5 Years


Thereafter


Total


Fair Value


Total


Fair Value(dollars in thousands)Long-Term Debt:Fixed Rate (US$)

$
1,793


$
1,885


$
1,899


$
1,220,165


$



$
352,703


$
1,578,445


$
1,293,478


$
1,576,982


$
1,489,671Average Interest Rate


10.0
%


10.0
%


10.0
%


3.2
%






2.8
%


3.2
%






3.2
%Fixed Rate (MP)

$
42,256


$
24,917


$
7,759


$
9,130


$
10,754


$
123,110


$
217,926


$
130,624


$
211,801


$
211,801Average Interest Rate


11.9
%


12.4
%


15.4
%


15.4
%


15.4
%


15.3
%


14.4
%






14.5
%Fixed Rate (BR)

$
3,276


$
3,781


$
4,579


$
5,435


$
6,660


$
69,866


$
93,597


$
45,193


$
96,134


$
96,134Average Interest Rate


19.1
%


19.9
%


20.3
%


21.0
%


21.7
%


24.2
%


23.3
%






24.8
%Variable Rate (US$)

$
20,260


$
81,039


$
237,639


$
81,039


$
26,396


$
10,227


$
456,600


$
394,812


$
331,600


$
331,600Average Interest Rate


4.6
%


4.6
%


4.2
%


4.6
%


4.6
%


4.6
%


4.4
%






6.8
%Variable Rate (MP)

$
25,172


$
12,586


$



$



$



$



$
37,758


$
35,008


$
50,000


$
50,000Average Interest Rate


9.5
%


9.5
%


















9.5
%






8.7
%Interest Rate Swap:Variable to Fixed

$
13,300


$
6,651


$



$



$



$



$
19,951


$
(145
)

$
26,420


$
(546
)Average Pay Rate


10.8
%


10.8
%


















10.8
%






10.8
%Average Receive Rate


9.5
%


9.5
%


















9.5
%






8.7
%   Item 4.
    Controls
    and Procedures.  Evaluation
    of Disclosure Controls and Procedures
      Changes
    in Internal Control over Financial Reporting
   58




---



##### 



PART II 
    OTHER INFORMATION  Item 1.
    Legal
    Proceedings.      Item 1A.
    Risk
    Factors.  Foreign
    Currency Volatility
  Form 10-K 4.b. We
    are subject to fluctuations in currency exchange rates and
    limitations on the expatriation or conversion of currencies,
    which may result in significant financial charges, increased
    costs of operations or decreased demand for our products and
    services, non-U.S. currencies,
    Changes
    in Economic Conditions
  Form 10-K 4.a. We
    face economic and political risks in our markets, which may
    limit our ability to implement our strategy and our financial
    flexibility and may disrupt our operations or hurt our
    performance,
  Regulatory
    Matters
  Form 10-K 6.
    Government regulations determine how we operate in various
    countries which could limit our growth and strategic
    plans,
 59




---



##### 



Form 10-K.
  Item 6.
    Exhibits.  ExhibitNumber

Exhibit Description12
.1

Ratio of Earnings to Fixed Charges.31
.1

Statement of Chief Executive Officer Pursuant to
    Rule 13a-14(a).31
.2

Statement of Chief Financial Officer Pursuant to
    Rule 13a-14(a).32
.1

Statement of Chief Executive Officer Pursuant to 18 U.S.C.
    Section 1350.32
.2

Statement of Chief Financial Officer Pursuant to 18 U.S.C.
    Section 1350.  60




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##### 



SIGNATURE
    By:
    /s/  CATHERINE
    E. NEEL        61




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##### 



EXHIBIT INDEX
  ExhibitNumber

Exhibit Description12
.1

Ratio of Earnings to Fixed Charges.31
.1

Statement of Chief Executive Officer Pursuant to
    Rule 13a-14(a).31
.2

Statement of Chief Financial Officer Pursuant to
    Rule 13a-14(a).32
.1

Statement of Chief Executive Officer Pursuant to 18 U.S.C.
    Section 1350.32
.2

Statement of Chief Financial Officer Pursuant to 18 U.S.C.
    Section 1350.  62