##### 



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
    June 30, 2007ORo

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.)   10700 Parkridge Boulevard,
    Suite 600
    Reston, Virginia

20191(Address of Principal Executive
    Offices)

(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
  Rule 12b-2
  þ o o
  Rule 12b-2 o þ
  þ o
    Number of Shares OutstandingTitle of Class

on August 2, 2007Common Stock, $0.001 par
    value per share

172,897,254




---



##### 



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


Financial StatementsCondensed
    Consolidated Balance Sheets  As of June 30, 2007
    and December 31, 2006


2Condensed
    Consolidated Statements of Operations and Comprehensive
    Income  For the Six and Three Months Ended
    June 30, 2007 and 2006


3Condensed
    Consolidated Statement of Changes in Stockholders
    Equity  For the Six Months Ended June 30,
    2007


4Condensed
    Consolidated Statements of Cash Flows  For the Six
    Months Ended June 30, 2007 and 2006


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


53Item 4.


Controls and
    Procedures


54Part II. Other
    Information.Item 1.


Legal
    Proceedings


55Item 1A.


Risk
    Factors


55Item 2.


Unregistered Sales
    of Equity Securities and Use of Proceeds


55Item 4.


Submission of
    Matters to a Vote of Security Holders


55Item 6.


Exhibits


56   1




---



##### 



PART I 
    FINANCIAL INFORMATION  Item 1.
    Financial
    Statements.  NII
    HOLDINGS, INC. AND SUBSIDIARIES
  CONDENSED CONSOLIDATED BALANCE SHEETS
 (in thousands, except par values)
 Unaudited
  June 30,


December 31,2007


2006ASSETSCurrent assetsCash and cash equivalents

$
1,482,243


$
708,591Accounts receivable, less
    allowance for doubtful accounts of $19,143 and $15,928


360,523



298,470Handset and accessory inventory


115,010



70,247Deferred income taxes, net


73,796



60,450Prepaid expenses and other


120,780



71,376Total current assets


2,152,352



1,209,134Property, plant and equipment,net of accumulated
    depreciation of $615,507 and $474,520


1,641,308



1,389,150Intangible assets,
    net


384,714



369,196Deferred income taxes,
    net


151,922



186,867Other assets


207,790



143,331Total assets

$
4,538,086


$
3,297,678LIABILITIES AND
    STOCKHOLDERS EQUITYCurrent liabilitiesAccounts payable

$
97,218


$
107,687Accrued expenses and other


363,116



342,465Deferred revenues


95,633



83,952Accrued interest


14,607



11,703Current portion of long-term debt


47,863



23,294Total current liabilities


618,437



569,101Long-term debt


2,324,762



1,134,387Deferred revenues


34,510



36,156Deferred credits


106,537



110,033Other long-term
    liabilities


112,359



101,521Total liabilities


3,196,605



1,951,198Commitments and contingencies
    (Note 5)Stockholders
    equityUndesignated preferred stock, par
    value $0.001, 10,000 shares authorized, no shares issued or
    outstanding  2007 and 2006






Common stock, par value $0.001,
    600,000 shares authorized  2007 and 2006,
    161,550 shares issued and outstanding  2007,
    161,814 shares issued and outstanding  2006


162



162Paid-in capital


512,712



723,644Retained earnings


793,625



630,538Accumulated other comprehensive
    income (loss)


34,982



(7,864
)Total stockholders equity


1,341,481



1,346,480Total liabilities and
    stockholders equity

$
4,538,086


$
3,297,678    2




---



##### 



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


Three Months EndedJune 30,


June 30,2007


2006


2007


2006Operating revenuesService and other revenues

$
1,449,364


$
1,040,205


$
758,681


$
534,249Digital handset and accessory
    revenues


49,909



44,495



26,985



22,1801,499,273



1,084,700



785,666



556,429Operating expensesCost of service (exclusive of
    depreciation and amortization included below)


398,940



279,162



210,045



144,812Cost of digital handsets and
    accessories


195,812



140,156



104,729



70,355Selling, general and administrative


489,448



356,990



264,306



186,454Depreciation


136,325



81,884



70,961



41,674Amortization


3,371



2,812



1,727



1,5481,223,896



861,004



651,768



444,843Operating income


275,377



223,696



133,898



111,586Other income
    (expense)Interest expense, net


(53,982
)


(42,447
)


(29,653
)


(21,032
)Interest income


25,158



25,738



13,788



13,137Foreign currency transaction gains
    (losses), net


5,799



(3,483
)


9,331



(2,342
)Other income (expense), net


633



(5,588
)


(1,194
)


(3,224
)(22,392
)


(25,780
)


(7,728
)


(13,461
)Income before income tax
    provision


252,985



197,916



126,170



98,125Income tax provision


(84,741
)


(77,015
)


(42,090
)


(42,222
)Net income

$
168,244


$
120,901


$
84,080


$
55,903Net income, per common share,
    basic

$
1.04


$
0.79


$
0.52


$
0.36Net income, per common share,
    diluted

$
0.94


$
0.70


$
0.47


$
0.32Weighted average number of
    common shares outstanding, basic


162,371



152,833



162,867



153,493Weighted average number of
    common shares outstanding, diluted


185,883



183,535



185,845



184,215Comprehensive income, net of
    income taxesForeign currency translation
    adjustment

$
42,090


$
(27,583
)

$
47,005


$
(29,406
)Reclassification for losses on
    derivatives included in other income (expense), net


395



1,401



42



314Unrealized gains on derivatives,
    net


361



1,718



123



1,504Other comprehensive income (loss)


42,846



(24,464
)


47,170



(27,588
)Net income


168,244



120,901



84,080



55,903Total comprehensive income

$
211,090


$
96,437


$
131,250


$
28,315    3




---



##### 



NII
    HOLDINGS, INC. AND SUBSIDIARIES
  CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN
    STOCKHOLDERS EQUITY
 For the Six Months Ended June 30, 2007
 (in thousands)
 Unaudited
  AccumulatedOther


TotalCommon Stock


Paid-in


Retained


Comprehensive


StockholdersShares


Amount


Capital


Earnings


(Loss) Income


EquityBalance, January 1,
    2007


161,814


$
162


$
723,644


$
630,538


$
(7,864
)

$
1,346,480Cumulative effect of adopting
    FIN 48














(5,157
)






(5,157
)Net income














168,244







168,244Other comprehensive income


















42,846



42,846Repurchase of common stock


(4,044
)


(4
)


(329,976
)










(329,980
)Share-based payment expense










29,123











29,123Conversion of 2.75% notes to
    common stock










3











3Exercise of stock options


3,780



4



77,970











77,974Tax benefit on exercise of stock
    options










2,565











2,565Tax benefit of prior periods
    stock option exercises










9,383











9,383Balance, June 30,
    2007


161,550


$
162


$
512,712


$
793,625


$
34,982


$
1,341,481    4




---



##### 



NII
    HOLDINGS, INC. AND SUBSIDIARIES
  CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 (in thousands)
 Unaudited
  Six Months Ended June 30,2007


2006Cash flows from operating
    activities:Net income

$
168,244


$
120,901Adjustments to reconcile net
    income to net cash provided by operating activities:Amortization of debt financing
    costs


2,603



2,323Depreciation and amortization


139,696



84,696Provision for losses on accounts
    receivable


21,804



14,759Losses on derivative instruments


585



1,909Foreign currency transaction
    (gains) losses, net


(5,799
)


3,483Deferred income tax provision


25,662



33,293Utilization of deferred credit


(3,729
)


(5,152
)Share-based payment expense


29,448



17,483Excess tax benefit from
    share-based payment


(2,505
)


(19,749
)Accretion of asset retirement
    obligations


2,868



1,668Other, net


150



1,827Change in assets and liabilities:Accounts receivable, gross


(74,083
)


(40,143
)Handset and accessory inventory


(42,977
)


(17,389
)Prepaid expenses and other


(45,852
)


(30,661
)Other long-term assets


(34,708
)


(16,333
)Accounts payable, accrued expenses
    and other


34,846



(2,268
)Current deferred revenue


9,720



7,742Other long-term liabilities


1,909



3,126Net cash provided by operating
    activities


227,882



161,515Cash flows from investing
    activities:Capital expenditures


(361,135
)


(265,811
)Payments for acquisitions,
    purchases of licenses and other


(15,365
)


(1,680
)Transfers to restricted cash


(919
)


(5,100
)Other


74



446Net cash used in investing
    activities


(377,345
)


(272,145
)Cash flows from financing
    activities:Proceeds from issuance of
    convertible notes


1,200,000



Repurchase of common stock


(329,980
)


Proceeds from stock option
    exercises


77,974



45,094Borrowings under syndicated loan
    facility






59,354Repayments under syndicated loan
    facility


(9,152
)


(9,941
)Payment of debt financing costs


(22,532
)


(2,668
)Gross proceeds from tower
    financing transactions


7,453



2,597Repayments under capital leases
    and tower financing transactions


(2,578
)


(2,325
)Excess tax benefit from
    share-based payment


2,505



19,749Net cash provided by financing
    activities


923,690



111,860Effect of exchange rate changes
    on cash and cash equivalents


(575
)


(15,120
)Net increase (decrease) in cash
    and cash equivalents


773,652



(13,890
)Cash and cash equivalents,
    beginning of period


708,591



877,536Cash and cash equivalents, end
    of period

$
1,482,243


$
863,646    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
    (Loss).
  June 30,


December 31,2007


2006(in thousands)Cumulative foreign currency
    translation adjustment

$
37,170


$
(4,920
)Unrealized losses on derivatives


(2,188
)


(2,944
)$
34,982


$
(7,864
)   Supplemental
    Cash Flow Information.
  Six Months EndedJune 30,2007


2006(in thousands)Capital expendituresCash paid for capital
    expenditures, including capitalized interest

$
361,135


$
265,811Changes in capital expenditures
    accrued and unpaid or financed


(19,746
)


61,061$
341,389


$
326,872Interest costsInterest expense

$
53,982


$
42,447Interest capitalized


3,186



7,471$
57,168


$
49,918Cash paid for interest, net of
    amounts capitalized

$
36,766


$
28,555Cash paid for income
    taxes

$
70,608


$
47,065     Net Income Per Common Share, Basic and
    Diluted.
 6




---



##### 



NII
    HOLDINGS, INC. AND SUBSIDIARIES
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
          Six Months Ended June 30, 2007


Six Months Ended June 30, 2006Income


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

$
168,244



162,371


$
1.04


$
120,901



152,833


$
0.79Effect of dilutive
    securities:Stock options






4,480











4,804Restricted stock






774











777Convertible notes, net of
    capitalized interest and taxes


5,797



18,258







7,376



25,121Diluted net income per
    share:Net income

$
174,041



185,883


$
0.94


$
128,277



183,535


$
0.70   7




---



##### 



NII
    HOLDINGS, INC. AND SUBSIDIARIES
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Three Months Ended June 30, 2007


Three Months Ended June 30, 2006Income


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

$
84,080



162,867


$
0.52


$
55,903



153,493


$
0.36Effect of dilutive
    securities:Stock options






4,193











4,708Restricted stock






527











895Convertible notes, net of
    capitalized interest and taxes


2,859



18,258







3,747



25,119Diluted net income per
    share:Net income

$
86,939



185,845


$
0.47


$
59,650



184,215


$
0.32   Repurchase of Common Stock.
  Reclassifications.
  New Accounting Pronouncements. 06-3, EITF 06-3. EITF 06-3 states EITF 06-3 EITF 06-3
     8




---



##### 



NII
    HOLDINGS, INC. AND SUBSIDIARIES
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Note 2.
    Supplemental
    Balance Sheet Information  Prepaid
    Expenses and Other.
    June 30,


December 31,2007


2006(in thousands)Short-term value added tax
    receivables

$
27,283


$
14,813Commissions


15,208



16,164Local taxes


13,932



4,630Advertising


10,171



70Spectrum fees


7,570



3,773General prepaid expenses


6,689



4,337Insurance


5,070



5,767Short-term advances to suppliers


4,945



4,793Rent


4,865



4,172Maintenance


4,177



3,112Insurance claims


3,792



3,193Interest receivable


3,491



527Other


13,587



6,025$
120,780


$
71,376    9




---



##### 



NII
    HOLDINGS, INC. AND SUBSIDIARIES
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Other
    Assets.
    June 30,


December 31,2007


2006(in thousands)Long-term value added tax
    receivables

$
86,349


$
66,931Deferred financing costs


37,516



17,304Long-term advances to suppliers


32,892



14,516Deposits


25,623



20,983Income tax receivable


16,018



15,996Handsets under operating leases


7,038



5,970Other


2,354



1,631$
207,790


$
143,331       Accrued
    Expenses and Other.
    June 30,


December 31,2007


2006(in thousands)Payroll related items and
    commissions

$
63,954


$
55,654Capital expenditures


63,287



81,839Network system and information
    technology


54,712



46,741Customer deposits


37,570



31,044Non-income based taxes


35,029



30,430Accrued contingencies


22,378



24,369Income taxes


20,204



16,774License fees


9,794



10,765Deferred tax liability


9,009



7,756Marketing


8,082



5,551Professional fees


5,613



4,288Insurance


3,886



3,163Inventory


3,806



2,236Other


25,792



21,855$
363,116


$
342,465  10




---



##### 



NII
    HOLDINGS, INC. AND SUBSIDIARIES
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Deferred
    Credits.
    June 30,


December 31,2007


2006(in thousands)Deferred income tax liability

$
89,124


$
88,886Deferred credit from AOL Mexico
    acquisition


17,413



21,147$
106,537


$
110,033   Other
    Long-Term Liabilities.
    June 30,


December 31,2007


2006(in thousands)Accrued contingencies

$
55,203


$
61,516Asset retirement obligations


34,847



29,297Severance plan liability


6,940



6,468Other


15,369



4,240$
112,359


$
101,521   Note 3.
    Intangible
    Assets    June 30, 2007


December 31, 2006Gross





Net


Gross





NetCarrying


Accumulated


Carrying


Carrying


Accumulated


CarryingValue


Amortization


Value


Value


Amortization


Value(in thousands)Amortizable intangible
    assets:Licenses

$
408,763


$
(24,049
)

$
384,714


$
389,526


$
(20,330
)

$
369,196Customer base


42,543



(42,543
)






42,401



(42,401
)


Trade name and other


1,735



(1,735
)






1,664



(1,664
)


Total intangible
    assets

$
453,041


$
(68,327
)

$
384,714


$
433,591


$
(64,395
)

$
369,196  11




---



##### 



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

Expense2007

$
16,3122008


29,7182009


29,7182010


29,7182011


29,718         Note 4.
    Debt    June 30,


December 31,2007


2006(in thousands)2.875% convertible notes due
    2034

$
300,000


$
300,0002.75% convertible notes due
    2025


349,997



350,0003.125% convertible notes due
    2012


1,200,000



Mexico syndicated loan
    facility


288,562



297,577Tower financing
    obligations


149,564



137,625Capital lease
    obligations


73,148



62,669Brazil spectrum license
    financing


11,314



9,770Other


40



40Total debt


2,372,625



1,157,681Less: current portion


(47,863
)


(23,294
)$
2,324,762


$
1,134,387   3.125% Convertible Notes.
 12




---



##### 



NII
    HOLDINGS, INC. AND SUBSIDIARIES
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      
    during any fiscal quarter commencing after September 30,
    2007, if the closing sale price of our common stock exceeds 120%
    of the conversion price for at least 20 trading days in the 30
    consecutive trading days ending on the last trading day of the
    preceding fiscal quarter;
    prior to May 15, 2012, during the five business day period
    after any five consecutive trading day period in which the
    trading price per note for each day of such period was less than
    98% of the product of the closing sale price of our common stock
    and the number of shares issuable upon conversion of $1,000
    principal amount of notes;
    at any time on or after May 15, 2012; or
    upon the occurrence of specified corporate events.      
    pay interest accruing for each day in the specified damages
    accrual period at a rate per annum equal to 0.5% of the
    principal amount of the note; and
    for any note that is submitted for conversion during the
    specified damages accrual period, (i) pay on the settlement
    date interest accruing for each day commencing on and including
    the first day of the damages accrual period and ending on, but
    excluding, the settlement date at a rate per annum equal to 0.5%
    of the principal amount of the note and (ii) issue and
    deliver for each $1,000 principal amount of notes submitted for
    conversion additional shares of underlying common stock equal to
    1% of the applicable conversion rate, except to the extent that
    we elect to deliver cash upon conversion.  2.875% Convertible Notes.
 13




---



##### 



NII
    HOLDINGS, INC. AND SUBSIDIARIES
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    2.75% Convertible Notes.
  Note 5.
    Commitments
    and Contingencies  Brazilian
    Contingencies.
      Argentine
    Contingencies.
    Turnover Tax.
   14




---



##### 



NII
    HOLDINGS, INC. AND SUBSIDIARIES
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        Universal Service Tax.
  Mexican
    Contingency.
    Legal
    Proceedings.
   15




---



##### 



NII
    HOLDINGS, INC. AND SUBSIDIARIES
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Note 6.
    Income
    Taxes  Adoption of FIN 48. non-U.S. jurisdictions
    Unrecognized tax
    benefits  January 1, 2007

$
55,965Unrecognized tax benefits
    originating from positions taken during the current period


6,828Foreign currency translation
    adjustment


58Unrecognized tax
    benefits  June 30, 2007

$
62,851       Deferred Tax Assets.
  Mexican Taxes.
  Note 7.
    Segment
    Reporting   16




---



##### 



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


IntercompanyMexico


Brazil


Argentina


Peru


and other


Eliminations


Consolidated(in thousands)Six Months Ended June 30,
    2007Service and other revenues

$
822,317


$
354,625


$
188,101


$
83,490


$
1,382


$
(551
)

$
1,449,364Digital handset and accessory
    revenues


10,648



17,726



15,654



5,881











49,909Operating revenues

$
832,965


$
372,351


$
203,755


$
89,371


$
1,382


$
(551
)

$
1,499,273Segment earnings (losses)

$
310,940


$
91,612


$
63,827


$
17,873


$
(69,179
)

$



$
415,073Management fee


(19,800
)














19,800







Depreciation and amortization


(68,214
)


(42,657
)


(14,868
)


(10,884
)


(3,270
)


197



(139,696
)Operating income (loss)


222,926



48,955



48,959



6,989



(52,649
)


197



275,377Interest expense


(29,312
)


(14,342
)


(1,124
)


(67
)


(14,335
)


5,198



(53,982
)Interest income


12,909



2,790



2,037



341



12,279



(5,198
)


25,158Foreign currency transaction gains
    (losses), net


1,208



4,239



306



54



(8
)






5,799Other income (expense), net


2,260



(1,554
)


1,577



1



(1,651
)






633Income (loss) before income tax

$
209,991


$
40,088


$
51,755


$
7,318


$
(56,364
)

$
197


$
252,985Capital expenditures

$
156,758


$
127,019


$
25,767


$
23,657


$
8,188


$



$
341,389Six Months Ended June 30,
    2006Service and other revenues

$
605,297


$
224,337


$
146,944


$
62,629


$
1,369


$
(371
)

$
1,040,205Digital handset and accessory
    revenues


12,620



17,400



10,641



3,834











44,495Operating revenues

$
617,917


$
241,737


$
157,585


$
66,463


$
1,369


$
(371
)

$
1,084,700Segment earnings (losses)

$
248,680


$
46,055


$
46,764


$
12,596


$
(45,703
)

$



$
308,392Depreciation and amortization


(44,819
)


(25,527
)


(7,495
)


(5,343
)


(1,709
)


197



(84,696
)Operating income (loss)


203,861



20,528



39,269



7,253



(47,412
)


197



223,696Interest expense


(16,879
)


(11,609
)


(1,449
)


(72
)


(12,485
)


47



(42,447
)Interest income


15,995



1,585



1,114



560



6,531



(47
)


25,738Foreign currency transaction
    (losses) gains, net


(3,542
)


(272
)


405



50



(124
)






(3,483
)Other (expense) income, net


(2,294
)


(2,736
)


229







(787
)






(5,588
)Income (loss) before income tax

$
197,141


$
7,496


$
39,568


$
7,791


$
(54,277
)

$
197


$
197,916Capital expenditures

$
169,918


$
98,383


$
32,392


$
16,521


$
9,658


$



$
326,872 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 June 30,
    2007Service and other revenues

$
427,197


$
191,411


$
96,968


$
42,555


$
817


$
(267
)

$
758,681Digital handset and accessory
    revenues


5,588



9,592



8,742



3,063











26,985Operating revenues

$
432,785


$
201,003


$
105,710


$
45,618


$
817


$
(267
)

$
785,666Segment earnings (losses)

$
157,186


$
46,864


$
32,066


$
8,793


$
(38,323
)

$



$
206,586Management fee


(9,900
)














9,900







Depreciation and amortization


(35,043
)


(22,888
)


(7,626
)


(5,596
)


(1,634
)


99



(72,688
)Operating income (loss)


112,243



23,976



24,440



3,197



(30,057
)


99



133,898Interest expense


(15,100
)


(7,821
)


(630
)


(30
)


(8,872
)


2,800



(29,653
)Interest income


5,726



1,485



1,138



144



8,095



(2,800
)


13,788Foreign currency transaction gains
    (losses), net


5,858



3,664



(170
)


10



(31
)






9,331Other (expense) income, net


(78
)


(789
)


1,330



1



(1,658
)






(1,194
)Income (loss) before income tax

$
108,649


$
20,515


$
26,108


$
3,322


$
(32,523
)

$
99


$
126,170Capital expenditures

$
63,775


$
74,730


$
15,838


$
12,860


$
6,664


$



$
173,867Three Months Ended June 30,
    2006Service and other revenues

$
307,182


$
117,647


$
76,681


$
32,113


$
829


$
(203
)

$
534,249Digital handset and accessory
    revenues


5,629



8,835



5,734



1,982











22,180Operating revenues

$
312,811


$
126,482


$
82,415


$
34,095


$
829


$
(203
)

$
556,429Segment earnings (losses)

$
125,283


$
23,743


$
24,230


$
6,198


$
(24,646
)

$



$
154,808Depreciation and amortization


(24,125
)


(13,491
)


(1,917
)


(2,833
)


(955
)


99



(43,222
)Operating income (loss)


101,158



10,252



22,313



3,365



(25,601
)


99



111,586Interest expense


(7,820
)


(6,040
)


(934
)


(36
)


(6,226
)


24



(21,032
)Interest income


8,154



850



580



269



3,308



(24
)


13,137Foreign currency transaction
    (losses) gains, net


(2,191
)


(171
)


132



9



(121
)






(2,342
)Other expense, net


(808
)


(1,745
)










(671
)






(3,224
)Income (loss) before income tax

$
98,493


$
3,146


$
22,091


$
3,607


$
(29,311
)

$
99


$
98,125Capital expenditures

$
96,123


$
56,703


$
24,498


$
11,910


$
8,783


$



$
198,017June 30, 2007Property, plant and equipment, net

$
780,853


$
550,140


$
162,062


$
96,847


$
51,769


$
(363
)

$
1,641,308Identifiable assets

$
2,088,206


$
853,783


$
371,475


$
189,502


$
1,035,483


$
(363
)

$
4,538,086December 31, 2006Property, plant and equipment, net

$
690,573


$
415,577


$
152,818


$
83,920


$
46,822


$
(560
)

$
1,389,150Identifiable assets

$
1,978,469


$
637,230


$
322,813


$
171,871


$
187,855


$
(560
)

$
3,297,678  18




---



##### 



NII
    HOLDINGS, INC. AND SUBSIDIARIES
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Note 8.
    Subsequent
    Events  Tender Offer for Conversion of 2.875% Convertible
    Notes.
  Spectrum Acquisitions.
 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


24Recent
    Developments


24Critical Accounting
    Policies and Estimates


25Ratio of Earnings
    to Fixed Charges


25Reclassifications


26Results of
    Operations


26a.
    Consolidated


27b. Nextel
    Mexico


33c. Nextel
    Brazil


37d. Nextel
    Argentina


40e. Nextel
    Peru


43f. Corporate and
    other


46Liquidity and
    Capital Resources


48Future Capital
    Needs and Resources


49Forward Looking
    Statements


51Effect of New
    Accounting Standards


52  20




---



##### 



Introduction    
    our consolidated financial condition and results of operations
    for the six- and three-month periods ended June 30, 2007
    and 2006; and
    significant factors which we believe could affect our
    prospective financial condition and results of operations.  Form 10-K Form 10-Q
 Business
    Overview      
    digital 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, on a private one-to-one call or on a 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 in the United States and, except for our
    customers in Chile, with TELUS subscribers in Canada;
    mobile internet services, text messaging services,
    e-mail
    services including
    Blackberrytm
    services that we recently introduced, location-based services,
    which include the use of Global Positioning System (GPS)
    technologies, digital media services and advanced
    Javatmenabled
    business applications, which are generally marketed as
    Nextel
    Onlinesm
    services; and
    international roaming capabilities, which are marketed as
    Nextel
    Worldwidesm
    services.   21




---



##### 



Focusing on Major Business Centers in Key Latin American
    Markets.
  Targeting High Value Business Customers.
  Providing Differentiated Services.
    Delivering Superior Customer Service.
 22




---



##### 



Selectively Expanding our Service Areas.
  Preserving the iDEN Opportunity.
  Planning for the Future.
 23




---



##### 



Digital
    Handsets in Commercial Service    Total Digital Handsets inCommercial ServiceJune 30,


June 30,Country

2007


2006(in thousands)Mexico


1,848



1,301Brazil


1,082



757Argentina


726



567Peru


399



296Chile


5



Total


4,060



2,921  Recent
    Developments  Issuance of 3.125% Convertible
    Notes.
  Repurchase of Common Stock.
  Tender Offer for Conversion of 2.875% Convertible
    Notes.
 24




---



##### 



Spectrum Acquisitions.
 Critical
    Accounting Policies and Estimates    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 MonthsEndedJune 30,2007

20064.10x


3.92x  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 fromJune 30,


Operating


June 30,


Operating


Previous Year2007


Revenues


2006


Revenues


Dollars


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

$
1,449,364



97
%

$
1,040,205



96
%

$
409,159



39
%Digital handset and accessory
    revenues


49,909



3
%


44,495



4
%


5,414



12
%1,499,273



100
%


1,084,700



100
%


414,573



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


(398,940
)


(27
)%


(279,162
)


(26
)%


(119,778
)


43
%Cost of digital handsets and
    accessories


(195,812
)


(13
)%


(140,156
)


(13
)%


(55,656
)


40
%Selling and marketing expenses


(196,778
)


(13
)%


(146,136
)


(13
)%


(50,642
)


35
%General and administrative expenses


(292,670
)


(20
)%


(210,854
)


(19
)%


(81,816
)


39
%Depreciation and amortization


(139,696
)


(9
)%


(84,696
)


(8
)%


(55,000
)


65
%Operating income


275,377



18
%


223,696



21
%


51,681



23
%Interest expense, net


(53,982
)


(3
)%


(42,447
)


(4
)%


(11,535
)


27
%Interest income


25,158



2
%


25,738



2
%


(580
)


(2
)%Foreign currency transaction gains
    (losses), net


5,799







(3,483
)






9,282



(266
)%Other income (expense), net


633







(5,588
)


(1
)%


6,221



(111
)%Income before income tax provision


252,985



17
%


197,916



18
%


55,069



28
%Income tax provision


(84,741
)


(6
)%


(77,015
)


(7
)%


(7,726
)


10
%Net income

$
168,244



11
%

$
120,901



11
%

$
47,343



39
% 27




---



##### 



% of





% ofConsolidated





Consolidated


Change fromJune 30,


Operating


June 30,


Operating


Previous Year2007


Revenues


2006


Revenues


Dollars


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

$
758,681



97
%

$
534,249



96
%

$
224,432



42
%Digital handset and accessory
    revenues


26,985



3
%


22,180



4
%


4,805



22
%785,666



100
%


556,429



100
%


229,237



41
%Cost of revenuesCost of service (exclusive of
    depreciation and amortization included below)


(210,045
)


(27
)%


(144,812
)


(26
)%


(65,233
)


45
%Cost of digital handsets and
    accessories


(104,729
)


(13
)%


(70,355
)


(12
)%


(34,374
)


49
%Selling and marketing expenses


(108,356
)


(14
)%


(76,295
)


(14
)%


(32,061
)


42
%General and administrative expenses


(155,950
)


(20
)%


(110,159
)


(20
)%


(45,791
)


42
%Depreciation and amortization


(72,688
)


(9
)%


(43,222
)


(8
)%


(29,466
)


68
%Operating income


133,898



17
%


111,586



20
%


22,312



20
%Interest expense, net


(29,653
)


(4
)%


(21,032
)


(4
)%


(8,621
)


41
%Interest income


13,788



2
%


13,137



2
%


651



5
%Foreign currency transaction gains
    (losses), net


9,331



1
%


(2,342
)






11,673



NMOther expense, net


(1,194
)






(3,224
)






2,030



(63
)%Income before income tax provision


126,170



16
%


98,125



18
%


28,045



29
%Income tax provision


(42,090
)


(5
)%


(42,222
)


(8
)%


132



Net income

$
84,080



11
%

$
55,903



10
%

$
28,177



50
%     NM-Not Meaningful
   28




---



##### 



1.
    Operating
    revenues    2.
    Cost of
    revenues    
    $69.7 million, or 51%, and $37.8 million, or 53%,
    increases in consolidated interconnect costs resulting from 48%
    and 49% increases in consolidated interconnect 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;
    $28.3 million, or 30%, and $15.1 million, or 32%,
    increases in consolidated direct switch and transmitter and
    receiver site costs resulting from a 25% increase in the total
    number of consolidated transmitter and receiver sites in service
    from June 30, 2006 to June 30, 2007; and
    $15.7 million, or 39%, and $7.0 million, or 33%,
    increases in consolidated service and repair costs mainly
    resulting from increases in subscribers participating under our
    handset maintenance programs.    3.
    Selling and
    marketing expenses    
    $18.8 million, or 32%, and $11.1 million, or 37%,
    increases in consolidated indirect commissions resulting from
    45% and 49% increases in total handset sales through external
    sales channels, partially offset by decreases in indirect
    commissions per handset sale resulting from a change in the mix
    of rate plans sold;
    $19.1 million, or 36%, and $10.9 million, or 40%,
    increases in consolidated payroll expenses and direct
    commissions caused by increases in commissions incurred as a
    result of 49% and 50% increases in total handset sales by
    internal sales personnel, partially offset by decreases in
    indirect commissions per handset sale resulting from a change in
    the mix of rate plans sold; and
    $11.0 million, or 38%, and $9.0 million, or 58%,
    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. 29




---



##### 



4.
    General and
    administrative expenses    
    $30.6 million, or 30%, and $18.3 million, or 35%,
    increases largely due to higher personnel costs related to an
    increase in headcount and higher facilities-related expenses due
    to continued subscriber growth and expansion into new areas;
    $24.0 million, or 47%, and $12.6 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;
    $8.9 million, or 68%, and $5.1 million, or 64%,
    increases in stock option compensation expense, primarily
    resulting from grants of stock options in April 2006 and April
    2007;
    $7.0 million, or 48%, and $4.4 million, or 60%,
    increases in consolidated bad debt expense, primarily as a
    result of the 38% and 41% increases in consolidated operating
    revenues. Bad debt as a percentage of revenue increased from
    1.36% for the six months ended June 30, 2006 to 1.45% for
    the same period in 2007 and from 1.32% for the three months
    ended June 30, 2006 to 1.49% for the same period in 2007.
    We expect bad debt as a percentage of revenue to remain
    relatively stable at its current levels for the remainder of
    2007; and
    $6.2 million, or 30%, and $3.8 million, or 37%,
    increases in information technology repair and maintenance costs
    primarily in Mexico and Brazil related to the expansion of their
    networks and the implementation of new systems.  5.
    Depreciation
    and amortization    6.
    Interest
    expense, net    
    $4.4 million and $1.5 million increases, respectively,
    in interest incurred on our towers financing transactions and
    capital lease obligations in Mexico and Brazil primarily due to
    increases in both the number of towers financed and capital
    leases;
    $4.3 million and $1.3 million decreases in capitalized
    interest related to a significant decrease in average
    construction-in-progress
    balances, primarily in Mexico due to the substantial completion
    of our expansion plan; and
    $3.1 million in incremental interest expense for both
    periods incurred on our 3.125% convertible notes that we issued
    in May 2007.  7.
    Foreign
    currency transaction gains (losses), net   30




---



##### 



8.
    Other income
    (expense), net    9.
    Income tax
    provision    Segment
    Results
    % ofConsolidated% of





% of


Selling,


Selling,Consolidated





Consolidated


General and


General and


SegmentSix Months Ended

Operating


Operating


Cost of


Cost of


Administrative


Administrative


EarningsJune 30, 2007

Revenues


Revenues


Revenues


Revenues


Expenses


Expenses


(Losses)(dollars in thousands)Nextel Mexico

$
832,965



56
%

$
(293,689
)


49
%

$
(228,336
)


47
%

$
310,940Nextel Brazil


372,351



25
%


(158,250
)


27
%


(122,489
)


25
%


91,612Nextel Argentina


203,755



13
%


(95,274
)


16
%


(44,654
)


9
%


63,827Nextel Peru


89,371



6
%


(46,466
)


8
%


(25,032
)


5
%


17,873Corporate and other


1,382







(1,624
)






(68,937
)


14
%


(69,179
)Intercompany eliminations


(551
)






551















Total consolidated

$
1,499,273



100
%

$
(594,752
)


100
%

$
(489,448
)


100
%   31




---



##### 



% ofConsolidated% of





% of


Selling,


Selling,Consolidated





Consolidated


General and


General and


SegmentThree Months Ended

Operating


Operating


Cost of


Cost of


Administrative


Administrative


EarningsJune 30, 2007

Revenues


Revenues


Revenues


Revenues


Expenses


Expenses


(Losses)(dollars in thousands)Nextel Mexico

$
432,785



55
%

$
(154,167
)


49
%

$
(121,432
)


46
%

$
157,186Nextel Brazil


201,003



26
%


(86,176
)


27
%


(67,963
)


26
%


46,864Nextel Argentina


105,710



13
%


(49,868
)


16
%


(23,776
)


9
%


32,066Nextel Peru


45,618



6
%


(23,908
)


8
%


(12,917
)


5
%


8,793Corporate and other


817







(922
)






(38,218
)


14
%


(38,323
)Intercompany eliminations


(267
)






267















Total consolidated

$
785,666



100
%

$
(314,774
)


100
%

$
(264,306
)


100
%   % ofConsolidated% of





% of


Selling,


Selling,Consolidated





Consolidated


General and


General and


SegmentSix Months Ended

Operating


Operating


Cost of


Cost of


Administrative


Administrative


EarningsJune 30, 2006

Revenues


Revenues


Revenues


Revenues


Expenses


Expenses


(Losses)(dollars in thousands)Nextel Mexico

$
617,917



57
%

$
(202,131
)


48
%

$
(167,106
)


47
%

$
248,680Nextel Brazil


241,737



22
%


(111,733
)


27
%


(83,949
)


24
%


46,055Nextel Argentina


157,585



15
%


(70,865
)


17
%


(39,956
)


11
%


46,764Nextel Peru


66,463



6
%


(34,216
)


8
%


(19,651
)


5
%


12,596Corporate and other


1,369







(744
)






(46,328
)


13
%


(45,703
)Intercompany eliminations


(371
)






371















Total consolidated

$
1,084,700



100
%

$
(419,318
)


100
%

$
(356,990
)


100
%   % ofConsolidated% of





% of


Selling,


Selling,Consolidated





Consolidated


General and


General and


SegmentThree Months Ended

Operating


Operating


Cost of


Cost of


Administrative


Administrative


EarningsJune 30, 2006

Revenues


Revenues


Revenues


Revenues


Expenses


Expenses


(Losses)(dollars in thousands)Nextel Mexico

$
312,811



56
%

$
(101,670
)


47
%

$
(85,858
)


46
%

$
125,283Nextel Brazil


126,482



23
%


(58,401
)


27
%


(44,338
)


24
%


23,743Nextel Argentina


82,415



15
%


(37,087
)


17
%


(21,098
)


11
%


24,230Nextel Peru


34,095



6
%


(17,794
)


9
%


(10,103
)


5
%


6,198Corporate and other


829







(418
)






(25,057
)


14
%


(24,646
)Intercompany eliminations


(203
)






203















Total consolidated

$
556,429



100
%

$
(215,167
)


100
%

$
(186,454
)


100
%  32




---



##### 



b.
    Nextel
    Mexico  % of





% ofNextel





NextelMexicos





Mexicos


Change fromJune 30,


Operating


June 30,


Operating


Previous Year2007


Revenues


2006


Revenues


Dollars


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

$
822,317



99
%

$
605,297



98
%

$
217,020



36
%Digital handset and accessory
    revenues


10,648



1
%


12,620



2
%


(1,972
)


(16
)%832,965



100
%


617,917



100
%


215,048



35
%Cost of revenuesCost of service (exclusive of
    depreciation and amortization included below)


(171,776
)


(21
)%


(127,168
)


(21
)%


(44,608
)


35
%Cost of digital handsets and
    accessories


(121,913
)


(15
)%


(74,963
)


(12
)%


(46,950
)


63
%(293,689
)


(36
)%


(202,131
)


(33
)%


(91,558
)


45
%Selling and marketing expenses


(117,960
)


(14
)%


(90,880
)


(15
)%


(27,080
)


30
%General and administrative expenses


(110,376
)


(13
)%


(76,226
)


(12
)%


(34,150
)


45
%Segment earnings


310,940



37
%


248,680



40
%


62,260



25
%Management fee


(19,800
)


(2
)%










(19,800
)


NMDepreciation and amortization


(68,214
)


(8
)%


(44,819
)


(7
)%


(23,395
)


52
%Operating income


222,926



27
%


203,861



33
%


19,065



9
%Interest expense, net


(29,312
)


(4
)%


(16,879
)


(3
)%


(12,433
)


74
%Interest income


12,909



2
%


15,995



3
%


(3,086
)


(19
)%Foreign currency transaction gains
    (losses), net


1,208







(3,542
)


(1
)%


4,750



(134
)%Other income (expense), net


2,260







(2,294
)






4,554



(199
)%Income before income tax

$
209,991



25
%

$
197,141



32
%

$
12,850



7
% 33




---



##### 



% of





% ofNextel





NextelMexicos





Mexicos


Change fromJune 30,


Operating


June 30,


Operating


Previous Year2007


Revenues


2006


Revenues


Dollars


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

$
427,197



99
%

$
307,182



98
%

$
120,015



39
%Digital handset and accessory
    revenues


5,588



1
%


5,629



2
%


(41
)


(1
)%432,785



100
%


312,811



100
%


119,974



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


(89,178
)


(21
)%


(64,951
)


(21
)%


(24,227
)


37
%Cost of digital handsets and
    accessories


(64,989
)


(15
)%


(36,719
)


(12
)%


(28,270
)


77
%(154,167
)


(36
)%


(101,670
)


(33
)%


(52,497
)


52
%Selling and marketing expenses


(63,715
)


(15
)%


(46,978
)


(15
)%


(16,737
)


36
%General and administrative expenses


(57,717
)


(13
)%


(38,880
)


(12
)%


(18,837
)


48
%Segment earnings


157,186



36
%


125,283



40
%


31,903



25
%Management fee


(9,900
)


(2
)%










(9,900
)


NMDepreciation and amortization


(35,043
)


(8
)%


(24,125
)


(8
)%


(10,918
)


45
%Operating income


112,243



26
%


101,158



32
%


11,085



11
%Interest expense, net


(15,100
)


(3
)%


(7,820
)


(3
)%


(7,280
)


93
%Interest income


5,726



1
%


8,154



3
%


(2,428
)


(30
)%Foreign currency transaction gains
    (losses), net


5,858



1
%


(2,191
)


(1
)%


8,049



NMOther expense, net


(78
)






(808
)






730



(90
)%Income before income tax

$
108,649



25
%

$
98,493



31
%

$
10,156



10
%     NM-Not Meaningful
   34




---



##### 



1.
    Operating
    revenues    2.
    Cost of
    revenues    
    $25.4 million, or 43%, and $13.4 million, or 44%,
    increases in interconnect costs generally resulting from 40% and
    38% 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;
    $10.5 million, or 23%, and $6.0 million, or 26%,
    increases in direct switch and transmitter and receiver site
    costs resulting from a 29% increase in the number of transmitter
    and receiver sites in service from June 30, 2006 to
    June 30, 2007; and
    $5.8 million, or 32%, and $2.5 million, or 26%,
    increases in service and repair costs largely due to increased
    activity under Nextel Mexicos handset maintenance program.   35




---



##### 



3.
    Selling and
    marketing expenses    
    $11.1 million, or 26%, and $6.4 million, or 29%,
    increases in indirect commissions primarily due to 50% and 56%
    increases in handset sales by Nextel Mexicos outside
    dealers, partially offset by a decrease in indirect commission
    per handset sale resulting from a change in the mix of rate
    plans sold;
    $9.3 million, or 36%, and $5.5 million, or 42%,
    increases in direct commissions and payroll expenses principally
    due to 78% and 81% increases in handset sales by Nextel
    Mexicos sales personnel, partially offset by a decrease in
    direct commission per handset sale resulting from a change in
    the mix of rate plans sold; and
    $5.6 million, or 29%, and $4.1 million, or 39%,
    increases in advertising costs largely due to the launch of new
    markets in connection with Nextel Mexicos expansion plan,
    the launch of new rate plans and objectives to reinforce market
    awareness of the Nextel brand name.  4.
    General and
    administrative expenses    
    $14.9 million, or 60%, and $7.7 million, or 60%,
    increase in customer care expenses primarily due to an increase
    in payroll and employee related expenses caused by an increase
    in customer care personnel necessary to support a larger
    customer base, as well as an increase in the number of retail
    stores;
    $12.4 million, or 37%, and $6.4 million, or 37%,
    increases in general corporate costs resulting from an increase
    in payroll and related expenses caused by more general and
    administrative personnel, higher business insurance expenses and
    increased facilities costs due to expansion into new
    markets; and
    $5.2 million, or 67%, and $3.7 million, or 104%,
    increases in bad debt expense. Bad debt as a percentage of
    revenue increased from 1.26% for the six months ended
    June 30, 2006 to 1.56% for the same period in 2007 and from
    1.13% for the three months ended June 30, 2006 to 1.67% for
    the same period in 2007. This increase resulted primarily from
    the introduction of certain rate plans that are available to
    customers with slightly higher credit risk. We expect bad debt
    as a percent of revenue to remain relatively stable through the
    remainder of 2007 and into 2008.  5.
    Management
    fee    6.
    Depreciation
    and amortization    7.
    Interest
    expense, net  construction-in-progress
 36




---



##### 



8.
    Foreign
    currency transaction gains (losses), net      9.
    Other income
    (expense), net    c.
    Nextel
    Brazil  % of





% ofNextel





NextelBrazils





Brazils


Change fromJune 30,


Operating


June 30,


Operating


Previous Year2007


Revenues


2006


Revenues


Dollars


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

$
354,625



95
%

$
224,337



93
%

$
130,288



58
%Digital handset and accessory
    revenues


17,726



5
%


17,400



7
%


326



2
%372,351



100
%


241,737



100
%


130,614



54
%Cost of revenuesCost of service (exclusive of
    depreciation and amortization included below)


(123,296
)


(33
)%


(77,785
)


(32
)%


(45,511
)


59
%Cost of digital handsets and
    accessories


(34,954
)


(9
)%


(33,948
)


(14
)%


(1,006
)


3
%(158,250
)


(42
)%


(111,733
)


(46
)%


(46,517
)


42
%Selling and marketing expenses


(49,620
)


(13
)%


(31,357
)


(13
)%


(18,263
)


58
%General and administrative expenses


(72,869
)


(20
)%


(52,592
)


(22
)%


(20,277
)


39
%Segment earnings


91,612



25
%


46,055



19
%


45,557



99
%Depreciation and amortization


(42,657
)


(12
)%


(25,527
)


(11
)%


(17,130
)


67
%Operating income


48,955



13
%


20,528



8
%


28,427



138
%Interest expense, net


(14,342
)


(4
)%


(11,609
)


(5
)%


(2,733
)


24
%Interest income


2,790



1
%


1,585



1
%


1,205



76
%Foreign currency transaction gains
    (losses), net


4,239



1
%


(272
)






4,511



NMOther expense, net


(1,554
)






(2,736
)


(1
)%


1,182



(43
)%Income before income tax

$
40,088



11
%

$
7,496



3
%

$
32,592



NM 37




---



##### 



% of





% ofNextel





NextelBrazils





Brazils


Change fromJune 30,


Operating


June 30,


Operating


Previous Year2007


Revenues


2006


Revenues


Dollars


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

$
191,411



95
%

$
117,647



93
%

$
73,764



63
%Digital handset and accessory
    revenues


9,592



5
%


8,835



7
%


757



9
%201,003



100
%


126,482



100
%


74,521



59
%Cost of revenuesCost of service (exclusive of
    depreciation and amortization included below)


(67,299
)


(34
)%


(41,197
)


(32
)%


(26,102
)


63
%Cost of digital handsets and
    accessories


(18,877
)


(9
)%


(17,204
)


(14
)%


(1,673
)


10
%(86,176
)


(43
)%


(58,401
)


(46
)%


(27,775
)


48
%Selling and marketing expenses


(29,023
)


(15
)%


(16,188
)


(13
)%


(12,835
)


79
%General and administrative expenses


(38,940
)


(19
)%


(28,150
)


(22
)%


(10,790
)


38
%Segment earnings


46,864



23
%


23,743



19
%


23,121



97
%Depreciation and amortization


(22,888
)


(11
)%


(13,491
)


(11
)%


(9,397
)


70
%Operating income


23,976



12
%


10,252



8
%


13,724



134
%Interest expense, net


(7,821
)


(4
)%


(6,040
)


(5
)%


(1,781
)


29
%Interest income


1,485



1
%


850







635



75
%Foreign currency transaction gains
    (losses), net


3,664



2
%


(171
)






3,835



NMOther expense, net


(789
)


(1
)%


(1,745
)


(1
)%


956



(55
)%Income before income tax

$
20,515



10
%

$
3,146



2
%

$
17,369



NM     NM-Not Meaningful
     38




---



##### 



1.
    Operating
    revenues    2.
    Cost of
    revenues    
    $28.4 million, or 79%, and $16.8 million, or 89%,
    increases in interconnect costs resulting from 51% and 53%
    increases in interconnect 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; and
    $12.6 million, or 43%, and $6.6 million, or 43%,
    increases in direct switch and transmitter and receiver site
    costs, including spectrum license fees, resulting from a 22%
    increase in the number of transmitter and receiver sites in
    service from June 30, 2006 to June 30, 2007 and
    increases in cost per site.  3.
    Selling and
    marketing expenses    
    $7.8 million, or 50%, and $4.9 million, or 61%,
    increases in payroll expenses and direct commissions largely as
    a result of 45% and 49% increases in handset sales by Nextel
    Brazils internal sales force and 37% increases in selling
    and marketing personnel necessary to support continued sales
    growth;
    $5.4 million, or 69%, and $3.5 million, or 83%,
    increases in indirect commissions resulting from 44% and 50%
    increases in handset sales through Nextel Brazils external
    sales channels, as well as increases in indirect commissions
    earned per handset sale resulting from premiums paid on sales
    exceeding pre-established thresholds; and
    $4.7 million, or 74%, and $4.3 million, or 132%,
    increases in advertising expenses resulting from the launch of
    new markets in connection with Nextel Brazils expansion
    plan, Nextel Brazils sponsorship of the Copa Nextel Stock
    Car series, a professional racecar event, and its continued
    print and media campaigns for various products and services,
    including the launch of Blackberry services.  4.
    General and
    administrative expenses    
    $7.3 million, or 55%, and $4.2 million, or 61%,
    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 54% and 59%
    increases in Nextel Brazils operating revenues;
    $6.0 million, or 39%, and $3.3 million, or 41%,
    increases in customer care expenses resulting from increases in
    customer care personnel necessary to support a larger customer
    base, as well as increases in various facilities expenses;
    $4.3 million, or 31%, and $1.8 million, or 24%,
    increases in general corporate and facilities costs primarily
    resulting from an increase in general and administrative
    personnel; and
    $2.3 million, or 52%, and $1.2 million, or 54%,
    increases in information technology expenses related to the
    expansion of Nextel Brazils network and its growing
    subscriber base. 39




---



##### 



5.
    Depreciation
    and amortization    6.
    Interest
    expense, net  construction-in-progress
  7.
    Foreign
    currency transaction gains (losses), net    d.
    Nextel
    Argentina  % of





% ofNextel





NextelArgentinas





Argentinas


Change fromJune 30,


Operating


June 30,


Operating


Previous Year2007


Revenues


2006


Revenues


Dollars


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

$
188,101



92
%

$
146,944



93
%

$
41,157



28
%Digital handset and accessory
    revenues


15,654



8
%


10,641



7
%


5,013



47
%203,755



100
%


157,585



100
%


46,170



29
%Cost of revenuesCost of service (exclusive of
    depreciation and amortization included below)


(70,720
)


(35
)%


(51,630
)


(33
)%


(19,090
)


37
%Cost of digital handsets and
    accessories


(24,554
)


(12
)%


(19,235
)


(12
)%


(5,319
)


28
%(95,274
)


(47
)%


(70,865
)


(45
)%


(24,409
)


34
%Selling and marketing expenses


(15,131
)


(7
)%


(12,815
)


(8
)%


(2,316
)


18
%General and administrative expenses


(29,523
)


(15
)%


(27,141
)


(17
)%


(2,382
)


9
%Segment earnings


63,827



31
%


46,764



30
%


17,063



36
%Depreciation and amortization


(14,868
)


(7
)%


(7,495
)


(5
)%


(7,373
)


98
%Operating income


48,959



24
%


39,269



25
%


9,690



25
%Interest expense, net


(1,124
)


(1
)%


(1,449
)


(1
)%


325



(22
)%Interest income


2,037



1
%


1,114



1
%


923



83
%Foreign currency transaction
    gains, net


306







405







(99
)


(24
)%Other income, net


1,577



1
%


229







1,348



NMIncome before income tax

$
51,755



25
%

$
39,568



25
%

$
12,187



31
% 40




---



##### 



% of





% ofNextel





NextelArgentinas





Argentinas


Change fromJune 30,


Operating


June 30,


Operating


Previous Year2007


Revenues


2006


Revenues


Dollars


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

$
96,968



92
%

$
76,681



93
%

$
20,287



26
%Digital handset and accessory
    revenues


8,742



8
%


5,734



7
%


3,008



52
%105,710



100
%


82,415



100
%


23,295



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


(36,520
)


(34
)%


(26,802
)


(33
)%


(9,718
)


36
%Cost of digital handsets and
    accessories


(13,348
)


(13
)%


(10,285
)


(12
)%


(3,063
)


30
%(49,868
)


(47
)%


(37,087
)


(45
)%


(12,781
)


34
%Selling and marketing expenses


(8,042
)


(8
)%


(6,876
)


(9
)%


(1,166
)


17
%General and administrative expenses


(15,734
)


(15
)%


(14,222
)


(17
)%


(1,512
)


11
%Segment earnings


32,066



30
%


24,230



29
%


7,836



32
%Depreciation and amortization


(7,626
)


(7
)%


(1,917
)


(2
)%


(5,709
)


298
%Operating income


24,440



23
%


22,313



27
%


2,127



10
%Interest expense, net


(630
)






(934
)


(1
)%


304



(33
)%Interest income


1,138



1
%


580



1
%


558



96
%Foreign currency transaction
    (losses) gains, net


(170
)






132







(302
)


(229
)%Other income, net


1,330



1
%










1,330



NMIncome before income tax

$
26,108



25
%

$
22,091



27
%

$
4,017



18
%     NM-Not Meaningful
    1.
    Operating
    revenues    
    29% increases in the average number of digital handsets in
    service, resulting primarily from growth in Nextel
    Argentinas existing markets; and
    $4.9 million, or 34%, and $2.5 million, or 33%,
    increases in revenues generated from Nextel Argentinas
    handset maintenance program due to a growth in the number of
    Nextel Argentinas customers that are utilizing this
    program. 41




---



##### 



2.
    Cost of
    revenues    
    $8.7 million, or 31%, and $4.3 million, or 29%,
    increases in interconnect costs largely as a result of 19%
    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;
    $6.6 million, or 60%, and $3.1 million, or 54%,
    increases in service and repair costs largely due to increased
    activity under Nextel Argentinas handset maintenance
    program; and
    $3.2 million, or 26%, and $1.6 million, or 26%,
    increases in direct switch and transmitter and receiver site
    costs, including spectrum license fees, due to a 16% increase in
    the number of transmitter and receiver sites in service from
    June 30, 2006 to June 30, 2007, as well as increases
    in rental costs and municipal taxes per site.    3.
    Selling and
    marketing expenses    4.
    General and
    administrative expenses    5.
    Depreciation
    and amortization   42




---



##### 



e.
    Nextel
    Peru  % of





% ofNextel





NextelPerus





Perus


Change fromJune 30,


Operating


June 30,


Operating


Previous Year2007


Revenues


2006


Revenues


Dollars


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

$
83,490



93
%

$
62,629



94
%

$
20,861



33
%Digital handset and accessory
    revenues


5,881



7
%


3,834



6
%


2,047



53
%89,371



100
%


66,463



100
%


22,908



34
%Cost of revenuesCost of service (exclusive of
    depreciation and amortization included below)


(32,635
)


(37
)%


(22,206
)


(33
)%


(10,429
)


47
%Cost of digital handsets and
    accessories


(13,831
)


(15
)%


(12,010
)


(18
)%


(1,821
)


15
%(46,466
)


(52
)%


(34,216
)


(51
)%


(12,250
)


36
%Selling and marketing expenses


(9,323
)


(10
)%


(7,844
)


(12
)%


(1,479
)


19
%General and administrative expenses


(15,709
)


(18
)%


(11,807
)


(18
)%


(3,902
)


33
%Segment earnings


17,873



20
%


12,596



19
%


5,277



42
%Depreciation and amortization


(10,884
)


(12
)%


(5,343
)


(8
)%


(5,541
)


104
%Operating income


6,989



8
%


7,253



11
%


(264
)


(4
)%Interest expense, net


(67
)






(72
)






5



(7
)%Interest income


341







560



1
%


(219
)


(39
)%Foreign currency transaction
    gains, net


54







50







4



8
%Other income, net


1















1



NMIncome before income tax

$
7,318



8
%

$
7,791



12
%

$
(473
)


(6
)% 43




---



##### 



% of





% ofNextel





NextelPerus





Perus


Change fromJune 30,


Operating


June 30,


Operating


Previous Year2007


Revenues


2006


Revenues


Dollars


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

$
42,555



93
%

$
32,113



94
%

$
10,442



33
%Digital handset and accessory
    revenues


3,063



7
%


1,982



6
%


1,081



55
%45,618



100
%


34,095



100
%


11,523



34
%Cost of revenuesCost of service (exclusive of
    depreciation and amortization included below)


(16,745
)


(37
)%


(11,647
)


(34
)%


(5,098
)


44
%Cost of digital handsets and
    accessories


(7,163
)


(16
)%


(6,147
)


(18
)%


(1,016
)


17
%(23,908
)


(53
)%


(17,794
)


(52
)%


(6,114
)


34
%Selling and marketing expenses


(5,173
)


(11
)%


(4,321
)


(13
)%


(852
)


20
%General and administrative expenses


(7,744
)


(17
)%


(5,782
)


(17
)%


(1,962
)


34
%Segment earnings


8,793



19
%


6,198



18
%


2,595



42
%Depreciation and amortization


(5,596
)


(12
)%


(2,833
)


(8
)%


(2,763
)


98
%Operating income


3,197



7
%


3,365



10
%


(168
)


(5
)%Interest expense, net


(30
)






(36
)






6



(17
)%Interest income


144







269



1
%


(125
)


(46
)%Foreign currency transaction
    gains, net


10







9







1



11
%Other income, net


1















1



NMIncome before income tax

$
3,322



7
%

$
3,607



11
%

$
(285
)


(8
)%     NM-Not Meaningful
    1.
    Operating
    revenues    2.
    Cost of
    revenues    
    $7.3 million, or 53%, and $3.3 million, or 46%,
    increases in interconnect costs largely as a result of 37% and
    31% increases in interconnect 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; and
    $1.6 million, or 30%, and $0.8 million, or 29%,
    increases in direct switch and transmitter and receiver site
    costs due to a 16% increase in the number of transmitter and
    receiver sites in service from June 30, 2006 to
    June 30, 2007. 44




---



##### 



3.
    Selling and
    marketing expenses    4.
    General and
    administrative expenses    
    $1.3 million, or 30%, and $0.8 million, or 34%,
    increases in general corporate costs due to increases in general
    and administrative personnel necessary to support an increase in
    information technology infrastructure associated with the
    continued expansion of Nextel Perus business;
    $1.0 million, or 22%, and $0.6 million, or 24%,
    increases in customer care expenses primarily due to increases
    in customer care and billing operations personnel caused by the
    need to support a growing customer base; and
    $0.9 million, or 251%, and $0.2 million, or 147%,
    increases in bad debt expenses. Bad debt as a percentage of
    revenue increased from 0.52% for the six months ended
    June 30, 2006 to 1.35% for the same period in 2007 and from
    0.49% for the three months ended June 30, 2006 to 0.90% for
    the same period in 2007, resulting from the introduction of
    certain rate plans that are available to customers with slightly
    higher credit risk.  5.
    Depreciation
    and amortization   45




---



##### 



f.
    Corporate
    and other  % of





% ofCorporate





Corporateand other





and other


Change fromJune 30,


Operating


June 30,


Operating


Previous Year2007


Revenues


2006


Revenues


Dollars


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

$
1,382



100
%

$
1,369



100
%

$
13



1
%Digital handset and accessory
    revenues






















1,382



100
%


1,369



100
%


13



1
%Cost of revenuesCost of service (exclusive of
    depreciation and amortization included below)


(1,064
)


(77
)%


(744
)


(54
)%


(320
)


43
%Cost of digital handsets and
    accessories


(560
)


(41
)%










(560
)


NM(1,624
)


(118
)%


(744
)


(54
)%


(880
)


118
%Selling and marketing expenses


(4,744
)


NM



(3,240
)


(237
)%


(1,504
)


46
%General and administrative expenses


(64,193
)


NM



(43,088
)


NM



(21,105
)


49
%Segment losses


(69,179
)


NM



(45,703
)


NM



(23,476
)


51
%Management fee


19,800



NM











19,800



NMDepreciation and amortization


(3,270
)


(237
)%


(1,709
)


(125
)%


(1,561
)


91
%Operating loss


(52,649
)


NM



(47,412
)


NM



(5,237
)


11
%Interest expense, net


(14,335
)


NM



(12,485
)


NM



(1,850
)


15
%Interest income


12,279



NM



6,531



NM



5,748



88
%Foreign currency transaction
    losses, net


(8
)


(1
)%


(124
)


(9
)%


116



(94
)%Other expense, net


(1,651
)


(119
)%


(787
)


(57
)%


(864
)


110
%Loss before income tax

$
(56,364
)


NM


$
(54,277
)


NM


$
(2,087
)


4
% 46




---



##### 



% of





% ofCorporate





Corporateand other





and other


Change fromJune 30,


Operating


June 30,


Operating


Previous Year2007


Revenues


2006


Revenues


Dollars


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

$
817



100
%

$
829



100
%

$
(12
)


(1
)%Digital handset and accessory
    revenues


















817



100
%


829



100
%


(12
)


(1
)%Cost of revenuesCost of service (exclusive of
    depreciation and amortization included below)


(570
)


(70
)%


(418
)


(50
)%


(152
)


36
%Cost of digital handsets and
    accessories


(352
)


(43
)%










(352
)


NM(922
)


(113
)%


(418
)


(50
)%


(504
)


121
%Selling and marketing expenses


(2,403
)


(294
)%


(1,932
)


(233
)%


(471
)


24
%General and administrative expenses


(35,815
)


NM



(23,125
)


NM



(12,690
)


55
%Segment losses


(38,323
)


NM



(24,646
)


NM



(13,677
)


55
%Management fee


9,900



NM











9,900



NMDepreciation and amortization


(1,634
)


(200
)%


(955
)


(115
)%


(679
)


71
%Operating loss


(30,057
)


NM



(25,601
)


NM



(4,456
)


17
%Interest expense, net


(8,872
)


NM



(6,226
)


NM



(2,646
)


42
%Interest income


8,095



NM



3,308



399
%


4,787



145
%Foreign currency transaction
    losses, net


(31
)


(4
)%


(121
)


(15
)%


90



(74
)%Other expense, net


(1,658
)


(203
)%


(671
)


(81
)%


(987
)


(147
)%Loss before income tax

$
(32,523
)


NM


$
(29,311
)


NM


$
(3,212
)


11
%     NM-Not Meaningful
  start-up
  1.
    General and
    administrative expenses   47




---



##### 



2.
    Management
    fee    3.
    Interest
    expense, net    4.
    Interest
    income   Liquidity
    and Capital Resources      Cash
    Flows
       48




---



##### 



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 grow our customer base; and
    fluctuations in foreign exchange rates.  Capital Needs and Contractual
    Obligations.
  
    operating expenses relating to our digital mobile networks;
    capital expenditures to expand and enhance our digital mobile
    networks, as discussed below under Capital
    Expenditures;
    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)

$
55,750


$
111,500


$
1,311,500


$
969,688


$
2,448,438Tower financing obligations(1)


42,264



84,523



84,516



262,836



474,139Mexico syndicated loan facility(1)


63,689



122,559



168,877







355,125Capital lease obligations(2)


11,913



24,547



23,921



101,965



162,346Spectrum fees(3)


13,839



27,677



27,677



172,982



242,175Spectrum license financing(4)


2,117



4,233



4,233



2,116



12,699Operating leases(5)


99,742



173,923



125,162



160,608



559,435Purchase obligations(6)


570,013



53,169



39,744







662,926Other long-term obligations(7)


5,950



16,890



15,616



159,234



197,690Total contractual commitments

$
865,277


$
619,021


$
1,801,246


$
1,829,429


$
5,114,973     (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 future payments due for 49




---



##### 



convertible notes include the amounts previously due as of
    June 30, 2007 under the $300.0 million principal
    amount of our 2.875% convertible notes that were tendered in
    July 2007.(2)
    
    These amounts represent principal and interest payments due
    under our co-location agreements to 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.(3)
    
    These amounts do not include variable fees based on certain
    operating revenues and are subject to increases in the Mexican
    Consumer Pricing Index.(4)
    
    These amounts represent payments related to spectrum license
    financing in Brazil.(5)
    
    These amounts principally include future lease costs related to
    our transmitter and receiver sites and switches and office
    facilities.(6)
    
    These amounts include maximum contractual purchase obligations
    under various agreements with our vendors, as well as estimated
    payments related to spectrum obligations in Argentina.(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 digital mobile networks to
    new market areas, primarily in Brazil and Chile;
    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 digital mobile network coverage around
    some major market areas;
    future minimum build-out requirements related to spectrum that
    we acquired or are in the process of acquiring in Mexico,
    Argentina and Peru;
    potential funding of future technology initiatives; and
    non-network
    related information technology projects.    Future Outlook.
 50




---



##### 




    cash and cash equivalents on hand and available to fund our
    operations;
    expected cash flows from operations;
    the anticipated level of capital expenditures;
    the anticipated level of spectrum acquisitions;
    our scheduled debt service; and
    income taxes.    
    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
  
    our ability to meet the operating goals established by our
    business plan;
    general economic conditions in Latin America and in the market
    segments that we are targeting for our digital mobile services; 51




---



##### 




    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;
    substantive terms of any international financial aid package
    that may be made available to any country in which our operating
    companies conduct business;
    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;
    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;
    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;
    the success of efforts to improve and satisfactorily address any
    issues relating to our digital mobile 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 digital mobile 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;
    our ability to access sufficient debt or equity capital to meet
    any future operating and financial needs; 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 2006 annual
    report on
    Form 10-K. Effect of
    New Accounting Standards  06-3, EITF 06-3. EITF 06-3 states EITF 06-3 EITF 06-3
   52




---



##### 



Item 3.
    Quantitative
    and Qualitative Disclosures About Market Risk.         53




---



##### 




    quoted market prices for our convertible notes;
    carrying values for our tower financing obligations and
    syndicated loan facility as interest rates were set recently
    when we entered into these transactions; and
    market values as determined by an independent third party
    investment banking firm for our purchased call options, written
    put options and interest rate swap.    Year of Maturity


June 30, 2007


December 31, 20061 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$)

$
1,393


$
1,781


$
1,872


$
1,885


$
1,201,450


$
669,192


$
1,877,573


$
2,780,196


$
678,202


$
1,258,202Average Interest Rate


10.0
%


10.0
%


10.0
%


10.0
%


3.1
%


3.0
%


3.1
%






3.1
%Fixed Rate (MP)

$
27,181


$
40,573


$
23,155


$
5,882


$
6,971


$
92,207


$
195,969


$
195,969


$
189,867


$
189,867Average Interest Rate


12.1
%


11.9
%


12.5
%


16.7
%


16.7
%


16.4
%


14.5
%






14.4
%Fixed Rate (BR)

$
3,038


$
3,379


$
3,813


$
4,384


$
5,129


$
68,987


$
88,730


$
88,730


$
75,589


$
75,589Average Interest Rate


17.5
%


18.4
%


19.3
%


20.2
%


21.1
%


25.9
%


24.5
%






25.5
%Variable Rate (US$)

$



$



$



$
156,600


$



$



$
156,600


$
156,600


$
156,600


$
156,600Average Interest Rate














6.6
%










6.6
%






6.7
%Variable Rate (MP)

$
16,250


$
25,000


$
12,501


$



$



$



$
53,751


$
53,751


$
57,423


$
57,423Average Interest Rate


8.5
%


8.5
%


8.5
%














8.5
%






8.5
%Interest Rate
    Swap:Variable to Fixed

$
8,587


$
13,210


$
6,605


$



$



$



$
28,402


$
(867
)

$
29,128


$
(1,406
)Average Pay Rate


10.8
%


10.8
%


10.8
%














10.8
%






10.8
%Average Receive Rate


8.5
%


8.5
%


8.5
%














8.5
%






8.5
%   Item 4.
    Controls
    and Procedures.  Evaluation
    of Disclosure Controls and Procedures
      Changes
    in Internal Control over Financial Reporting
   54




---



##### 



PART II 
    OTHER INFORMATION  Item 1.
    Legal
    Proceedings.      Item 1A.
    Risk
    Factors.  Form 10-K.
  Item 2.
    Unregistered
    Sales of Equity Securities and Use of Proceeds    Approximate DollarTotal Number of


Value of Shares ThatShares Purchased as


May Yet BeTotal Number of


Average Price


Part of Publicly


Purchased Under thePeriod

Shares Purchased


Per Share


Announced Plan


PlanApril 1, 2007 
    April 30, 2007





$




May 1, 2007 
    May 31, 2007










June 1, 2007 
    June 30, 2007


4,043,725



81.60



4,043,725Total


4,043,725



81.60



4,043,725


$
170,039,910   Item 4.
    Submission
    of Matters to a Vote of Security Holders      Votes


Broker NonNominee

Votes For


Withheld


VotesJohn Donovan


94,209,702



55,747,598



N/ASteven P. Dussek


106,902,306



43,054,994



N/ASteven M. Shindler


143,752,555



6,204,745



N/A     Votes


Votes


Broker NonNominee

Votes For


Against


Withheld


VotesRatification of Independent
    Registered Public Accounting Firm


149,592,610



316,821



47,869



N/A    55




---



##### 



Item 6.
    Exhibits.  ExhibitNumber

Exhibit Description4
.1

Indenture governing our 3.125%
    convertible notes due 2012, dated June 5, 2007, by and
    between NII Holdings, Inc. and Wilmington Trust Company, as
    Indenture Trustee.10
.1

Purchase Agreement for the sale of
    our 3.125% convertible notes due 2012, dated as of May 30,
    2007, by and among NII Holdings, Inc. and the initial purchasers.10
.2

Registration Rights Agreement
    related to our 3.125% convertible notes due 2012, dated as of
    June 5, 2007, by and among NII Holdings, Inc. and the
    initial purchasers.12
.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.  56




---



##### 



SIGNATURE
    By:
    /s/  DANIEL
    E. FREIMAN        57




---



##### 



EXHIBIT INDEX
  ExhibitNumber

Exhibit Description4
.1

Indenture governing our 3.125%
    convertible notes due 2012, dated June 5, 2007, by and
    between NII Holdings, Inc. and Wilmington Trust Company, as
    Indenture Trustee.10
.1

Purchase Agreement for the sale of
    our 3.125% convertible notes due 2012, dated as of May 30,
    2007, by and among NII Holdings, Inc. and the initial purchasers.10
.2

Registration Rights Agreement
    related to our 3.125% convertible notes due 2012, dated as of
    June 5, 2007, by and among NII Holdings, Inc. and the
    initial purchasers.12
.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.  58