##### 



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, 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 November 1, 2007Common Stock, $0.001 par value per share

173,218,233




---



##### 



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


Financial Statements


2Condensed Consolidated Balance Sheets 
    As of September 30, 2007 and December 31, 2006


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


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


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


5Notes to Condensed Consolidated Financial
    Statements


6Item 2.


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


21Item 3.


Quantitative and Qualitative Disclosures About Market Risk


56Item 4.


Controls and Procedures


57Part II. Other Information.Item 1.


Legal Proceedings


58Item 1A.


Risk Factors


58Item 6.


Exhibits


58   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 31,2007


2006ASSETSCurrent assetsCash and cash equivalents

$
1,545,403


$
708,591Accounts receivable, less allowance for doubtful accounts of
    $19,432 and $15,928


407,825



298,470Handset and accessory inventory


110,566



70,247Deferred income taxes, net


84,313



60,450Prepaid expenses and other


98,247



71,376Total current assets


2,246,354



1,209,134Property, plant and equipment,net of accumulated
    depreciation of $691,243 and $474,520


1,709,258



1,389,150Intangible assets, net


409,504



369,196Deferred income taxes, net


133,163



186,867Other assets


226,358



143,331Total assets

$
4,724,637


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

$
94,724


$
107,687Accrued expenses and other


404,208



342,465Deferred revenues


102,378



83,952Accrued interest


18,036



11,703Current portion of long-term debt


48,342



23,294Total current liabilities


667,688



569,101Long-term debt


2,032,872



1,134,387Deferred revenues


33,693



36,156Deferred credits


105,205



110,033Other long-term liabilities


123,668



101,521Total liabilities


2,963,126



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, 173,215 shares issued
    and outstanding  2007, 161,814 shares issued and
    outstanding  2006


173



162Paid-in capital


839,442



723,644Retained earnings


875,291



630,538Accumulated other comprehensive income (loss)


46,605



(7,864
)Total stockholders equity


1,761,511



1,346,480Total liabilities and stockholders equity

$
4,724,637


$
3,297,678    2




---



##### 



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


Three Months EndedSeptember 30,


September 30,2007


2006


2007


2006Operating revenuesService and other revenues

$
2,275,370


$
1,630,291


$
826,006


$
590,086Digital handset and accessory revenues


76,826



69,995



26,917



25,5002,352,196



1,700,286



852,923



615,586Operating expensesCost of service (exclusive of depreciation and amortization
    included below)


630,253



438,724



231,313



159,562Cost of digital handsets and accessories


300,182



228,957



104,370



88,801Selling, general and administrative


771,508



566,196



282,060



209,206Depreciation


209,877



132,655



73,552



50,771Amortization


7,040



4,443



3,669



1,6311,918,860



1,370,975



694,964



509,971Operating income


433,336



329,311



157,959



105,615Other income (expense)Interest expense, net


(89,592
)


(66,103
)


(35,610
)


(23,656
)Interest income


48,996



38,997



23,838



13,259Foreign currency transaction gains (losses), net


12,637



(801
)


6,838



2,682Debt conversion expense


(26,455
)






(26,455
)


Other expense, net


(986
)


(7,275
)


(1,619
)


(1,687
)(55,400
)


(35,182
)


(33,008
)


(9,402
)Income before income tax provision


377,936



294,129



124,951



96,213Income tax provision


(128,026
)


(107,540
)


(43,285
)


(30,525
)Net income

$
249,910


$
186,589


$
81,666


$
65,688Net income, per common share, basic

$
1.52


$
1.22


$
0.48


$
0.43Net income, per common share, diluted

$
1.40


$
1.08


$
0.46


$
0.38Weighted average number of common shares outstanding,
    basic


164,942



153,403



170,000



154,524Weighted average number of common shares outstanding,
    diluted


185,098



183,839



183,621



184,319Comprehensive income, net of income taxesForeign currency translation adjustment

$
53,544


$
(4,193
)

$
11,454


$
23,390Reclassification for losses on derivatives included in other
    expense, net


456



1,671



60



257Unrealized gains (losses) on derivatives, net


469



42



109



(1,663
)Other comprehensive income (loss)


54,469



(2,480
)


11,623



21,984Net income


249,910



186,589



81,666



65,688Total comprehensive income

$
304,379


$
184,109


$
93,289


$
87,672    3




---



##### 



NII
    HOLDINGS, INC. AND SUBSIDIARIES
    CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN
    STOCKHOLDERS EQUITY
    For the Nine Months Ended September 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














249,910







249,910Other comprehensive income


















54,469



54,469Conversion of 2.75% notes and 2.875% notes to common
    stock


11,268



11



295,649











295,660Repurchase of common stock


(4,044
)


(4
)


(329,976
)










(329,980
)Reversal of deferred tax asset valuation allowances










1,728











1,728Share-based payment expense for equity-based awards










50,674











50,674Exercise of stock options


4,177



4



89,606











89,610Tax benefit on exercise of stock options










(1,266
)










(1,266
)Tax benefit of prior periods stock option exercises










9,383











9,383Balance, September 30, 2007


173,215


$
173


$
839,442


$
875,291


$
46,605


$
1,761,511    4




---



##### 



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


2006Cash flows from operating activities:Net income

$
249,910


$
186,589Adjustments to reconcile net income to net cash provided by
    operating activities:Amortization of debt financing costs


4,683



3,535Depreciation and amortization


216,917



137,098Provision for losses on accounts receivable


33,199



21,783Foreign currency transaction (gains) losses, net


(12,637
)


801Deferred income tax provision


31,336



32,788Utilization of deferred credit


(5,031
)


(5,982
)Share-based payment expense


51,159



30,375Excess tax benefit from share-based payment






(17,596
)Accretion of asset retirement obligations


4,271



2,898Other, net


(1,562
)


4,765Change in assets and liabilities:Accounts receivable, gross


(129,059
)


(77,451
)Handset and accessory inventory


(39,435
)


(18,630
)Prepaid expenses and other


(24,171
)


(26,649
)Other long-term assets


(38,679
)


(15,779
)Accounts payable, accrued expenses and other


98,017



42,006Current deferred revenue


15,455



15,309Other long-term liabilities


822



2,328Net cash provided by operating activities


455,195



318,188Cash flows from investing activities:Capital expenditures


(499,748
)


(424,085
)Payments for acquisitions, purchases of licenses and other


(44,180
)


(3,197
)Transfers to restricted cash


(12,259
)


(205,295
)Proceeds from maturities of short-term investments






7,371Other


1,568



779Net cash used in investing activities


(554,619
)


(624,427
)Cash flows from financing activities:Proceeds from issuance of convertible notes


1,200,000



Payments to repurchase common stock


(329,980
)


Proceeds from stock option exercises


89,610



49,254Borrowings under syndicated loan facility






60,885Repayments under syndicated loan facility


(9,152
)


(9,941
)Payment of debt financing costs


(23,090
)


(2,668
)Gross proceeds from tower financing transactions


13,213



4,683Repayments under software financing






(13,375
)Repayments under capital leases and tower financing transactions


(4,014
)


(3,082
)Excess tax benefit from share-based payment






17,596Net cash provided by financing activities


936,587



103,352Effect of exchange rate changes on cash and cash
    equivalents


(351
)


(6,394
)Net increase (decrease) in cash and cash equivalents


836,812



(209,281
)Cash and cash equivalents, beginning of period


708,591



877,536Cash and cash equivalents, end of period

$
1,545,403


$
668,255    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).
  September 30,


December 31,2007


2006(in thousands)Cumulative foreign currency translation adjustment

$
48,624


$
(4,920
)Unrealized losses on derivatives


(2,019
)


(2,944
)$
46,605


$
(7,864
)   Supplemental
    Cash Flow Information.
  Nine Months EndedSeptember 30,2007


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

$
499,748


$
424,085Changes in capital expenditures accrued and unpaid or financed


(33,817
)


37,721$
465,931


$
461,806Interest costsInterest expense

$
89,592


$
66,103Interest capitalized


4,266



10,760$
93,858


$
76,863Cash paid for interest, net of amounts capitalized

$
60,191


$
49,013Cash paid for income taxes

$
94,930


$
64,098     Net Income Per Common Share, Basic and
    Diluted.
 6




---



##### 



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


Nine Months Ended September 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

$
249,910



164,942


$
1.52


$
186,589



153,403


$
1.22Effect of dilutive securities:Stock options






4,051











4,477Restricted stock






612











842Convertible notes, net of capitalized interest and taxes


8,781



15,493







11,389



25,117Diluted net income per share:Net income

$
258,691



185,098


$
1.40


$
197,978



183,839


$
1.08   7




---



##### 



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


Three Months Ended September 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

$
81,666



170,000


$
0.48


$
65,688



154,524


$
0.43Effect of dilutive securities:Stock options






3,268











3,885Restricted stock






301











800Convertible notes, net of capitalized interest and taxes


2,126



10,052







4,013



25,110Diluted net income per share:Net income

$
83,792



183,621


$
0.46


$
69,701



184,319


$
0.38   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.
    September 30,


December 31,2007


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

$
25,037


$
14,813Commissions


12,142



16,164Local taxes


7,610



4,630Short-term advances to suppliers


7,535



4,793Advertising


6,394



70Insurance claims


6,221



3,193General prepaid expenses


5,448



4,337Rent


5,008



4,172Spectrum fees


4,516



3,773Maintenance


4,100



3,112Interest receivable


3,243



527Insurance


2,096



5,767Other assets


8,897



6,025$
98,247


$
71,376  9




---



##### 



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


December 31,2007


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

$
95,293


$
66,931Deposits and restricted cash


40,324



20,983Deferred financing costs


36,277



17,304Long-term advances to suppliers


27,289



14,516Income tax receivable


15,933



15,996Handsets under operating leases


7,706



5,970Other


3,536



1,631$
226,358


$
143,331          10




---



##### 



NII
    HOLDINGS, INC. AND SUBSIDIARIES
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
  Accrued
    Expenses and Other.
    September 30,


December 31,2007


2006(in thousands)Payroll related items and commissions

$
75,849


$
55,654Network system and information technology


56,316



46,741Capital expenditures


49,247



81,839Non-income based taxes


40,223



30,430Customer deposits


39,972



31,044Income taxes


27,085



16,774Accrued contingencies


26,374



24,369License fees


13,031



10,765Professional fees


11,493



4,288Deferred tax liability


9,520



7,756Marketing


7,259



5,551Insurance


6,531



3,163Other


41,308



24,091$
404,208


$
342,465   Deferred
    Credits.
    September 30,


December 31,2007


2006(in thousands)Deferred income tax liability

$
89,191


$
88,886Deferred credit from AOL Mexico acquisition


16,014



21,147$
105,205


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


December 31,2007


2006(in thousands)Accrued contingencies

$
58,056


$
61,516Asset retirement obligations


37,320



29,297Severance plan liability


7,212



6,468Other


21,080



4,240$
123,668


$
101,521  11




---



##### 



NII
    HOLDINGS, INC. AND SUBSIDIARIES
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
  Note 3.
    Intangible
    Assets    September 30, 2007


December 31, 2006Gross





Net


Gross





NetCarrying


Accumulated


Carrying


Carrying


Accumulated


CarryingValue


Amortization


Value


Value


Amortization


Value(in thousands)Amortizable intangible assets:Licenses

$
437,313


$
(27,809
)

$
409,504


$
389,526


$
(20,330
)

$
369,196Customer base


42,364



(42,364
)






42,401



(42,401
)


Trade name and other


1,763



(1,763
)






1,664



(1,664
)


Total intangible assets

$
481,440


$
(71,936
)

$
409,504


$
433,591


$
(64,395
)

$
369,196     EstimatedAmortizationYears

Expense2007

$
14,4962008


30,1612009


31,1832010


31,1832011


31,183     License
    Acquisitions and Renewals
       12




---



##### 



NII
    HOLDINGS, INC. AND SUBSIDIARIES
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
    Note 4.
    Debt    September 30,


December 31,2007


2006(in thousands)3.125% convertible notes due 2012

$
1,200,000


$
2.75% convertible notes due 2025


349,996



350,0002.875% convertible notes due 2034


45



300,000Mexico syndicated loan facility


287,860



297,577Tower financing obligations


157,196



137,625Capital lease obligations


73,827



62,669Brazil spectrum license financing


12,250



9,770Other


40



40Total debt


2,081,214



1,157,681Less: current portion


(48,342
)


(23,294
)$
2,032,872


$
1,134,387   3.125% Convertible Notes.
    
    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 13




---



##### 



NII
    HOLDINGS, INC. AND SUBSIDIARIES
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
   
    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.
  2.75% Convertible Notes.
  Brazil Syndicated Loan Facility.
   14




---



##### 



NII
    HOLDINGS, INC. AND SUBSIDIARIES
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
  Note 5.
    Commitments
    and Contingencies  Brazilian
    Contingencies.
      Argentine
    Contingencies.
    Turnover Tax.
         15




---



##### 



NII
    HOLDINGS, INC. AND SUBSIDIARIES
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
    Universal Service Tax.
  Mexican
    Contingency.
    Legal
    Proceedings.
    Note 6.
    Income
    Taxes  Adoption of FIN 48. non-U.S. jurisdictions
 16




---



##### 



NII
    HOLDINGS, INC. AND SUBSIDIARIES
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
    Unrecognized tax benefits  January 1, 2007

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


9,414Foreign currency translation adjustment


(141
)Unrecognized tax benefits  September 30, 2007

$
65,238       Deferred Tax Assets.
  Mexican Taxes.
   17




---



##### 



NII
    HOLDINGS, INC. AND SUBSIDIARIES
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
      Note 7.
    Segment
    Reporting    18




---



##### 



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


IntercompanyMexico


Brazil


Argentina


Peru


and other


Eliminations


Consolidated(in thousands)Nine Months Ended September 30, 2007Service and other revenues

$
1,280,982


$
570,308


$
293,538


$
128,947


$
2,454


$
(859
)

$
2,275,370Digital handset and accessory revenues


18,093



25,257



24,270



9,201



5







76,826Operating revenues

$
1,299,075


$
595,565


$
317,808


$
138,148


$
2,459


$
(859
)

$
2,352,196Segment earnings (losses)

$
491,556


$
141,619


$
100,877


$
26,019


$
(109,818
)

$



$
650,253Management 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



73,885



78,372



10,817



(85,101
)


295



433,336Interest expense


(44,765
)


(22,221
)


(1,904
)


(95
)


(28,403
)


7,796



(89,592
)Interest income


20,948



4,457



3,417



499



27,471



(7,796
)


48,996Foreign 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


$



$
465,931Nine Months Ended September 30, 2006Service and other revenues

$
946,500


$
354,863


$
229,629


$
97,978


$
1,890


$
(569
)

$
1,630,291Digital handset and accessory revenues


17,468



28,707



17,743



6,077











69,995Operating revenues

$
963,968


$
383,570


$
247,372


$
104,055


$
1,890


$
(569
)

$
1,700,286Segment earnings (losses)

$
375,717


$
76,128


$
71,951


$
18,489


$
(75,876
)

$



$
466,409Depreciation and amortization


(72,352
)


(40,671
)


(13,203
)


(8,421
)


(2,746
)


295



(137,098
)Operating income (loss)


303,365



35,457



58,748



10,068



(78,622
)


295



329,311Interest expense


(27,421
)


(17,857
)


(2,118
)


(106
)


(18,672
)


71



(66,103
)Interest income


24,697



2,480



1,765



850



9,276



(71
)


38,997Foreign currency transaction (losses) gains, net


(823
)


(338
)


394



80



(114
)






(801
)Other (expense) income, net


(2,116
)


(4,567
)


319







(911
)






(7,275
)Income (loss) before income tax

$
297,702


$
15,175


$
59,108


$
10,892


$
(89,043
)

$
295


$
294,129Capital expenditures

$
231,678


$
148,173


$
42,015


$
24,700


$
15,240


$



$
461,806Three Months Ended September 30, 2007Service and other revenues

$
458,665


$
215,683


$
105,437


$
45,457


$
1,072


$
(308
)

$
826,006Digital handset and accessory revenues


7,445



7,531



8,616



3,320



5







26,917Operating revenues

$
466,110


$
223,214


$
114,053


$
48,777


$
1,077


$
(308
)

$
852,923Segment earnings (losses)

$
180,616


$
50,007


$
37,050


$
8,146


$
(40,639
)

$



$
235,180Management 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



24,930



29,413



3,828



(32,452
)


98



157,959Interest expense


(15,453
)


(7,879
)


(780
)


(28
)


(14,068
)


2,598



(35,610
)Interest income


8,039



1,667



1,380



158



15,192



(2,598
)


23,838Foreign 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


$



$
124,542  19




---



##### 



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, 2006Service and other revenues

$
341,203


$
130,526


$
82,685


$
35,349


$
521


$
(198
)

$
590,086Digital handset and accessory revenues


4,848



11,307



7,102



2,243











25,500Operating revenues

$
346,051


$
141,833


$
89,787


$
37,592


$
521


$
(198
)

$
615,586Segment earnings (losses)

$
127,037


$
30,073


$
25,187


$
5,893


$
(30,173
)

$



$
158,017Depreciation and amortization


(27,533
)


(15,144
)


(5,708
)


(3,078
)


(1,037
)


98



(52,402
)Operating income (loss)


99,504



14,929



19,479



2,815



(31,210
)


98



105,615Interest expense


(10,542
)


(6,248
)


(669
)


(34
)


(6,187
)


24



(23,656
)Interest income


8,702



895



651



290



2,745



(24
)


13,259Foreign currency transaction gains (losses), net


2,719



(66
)


(11
)


30



10







2,682Other income (expense), net


178



(1,831
)


90







(124
)






(1,687
)Income (loss) before income tax

$
100,561


$
7,679


$
19,540


$
3,101


$
(34,766
)

$
98


$
96,213Capital expenditures

$
61,760


$
49,790


$
9,623


$
8,179


$
5,582


$



$
134,934September 30, 2007Property, plant and equipment, net

$
782,216


$
603,007


$
167,959


$
98,869


$
57,471


$
(264
)

$
1,709,258Identifiable assets

$
2,193,815


$
952,576


$
404,704


$
222,100


$
951,706


$
(264
)

$
4,724,637December 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  20




---



##### 



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


22Business Overview


22Digital Handsets in Commercial Service


25Recent Developments


25Critical Accounting Policies and Estimates


26Ratio of Earnings to Fixed Charges


27Reclassifications


27Results of Operations


27a. Consolidated


28b. 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   21




---



##### 



Introduction
    
    our consolidated financial condition and results of operations
    for the nine- and three-month periods ended September 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, 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, except for our customers in Chile, with TELUS
    subscribers using compatible handsets 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
    Javatm
    enabled business applications, which are generally marketed as
    Nextel
    Onlinesm
    services; and
    international roaming capabilities, which are marketed as
    Nextel
    Worldwidesm
    services.  and/or
 22




---



##### 



Focusing on Major Business Centers in Key Latin American
    Markets.
  Targeting High Value Business Customers.
  Providing Differentiated Services.
  Delivering Superior Customer Service.
 23




---



##### 



Selectively Expanding our Service Areas.
  Preserving the iDEN Opportunity.
  Planning for the Future.
 24




---



##### 



Digital
    Handsets in Commercial Service
    Mexico


Brazil


Argentina


Peru


Chile


Total(handsets in thousands)Digital handsets in commercial service 
    December 31, 2006


1,544



899



651



345



1



3,440Net subscriber additions


445



289



117



91



6



948Digital handsets in commercial service 
    September 30, 2007


1,989



1,188



768



436



7



4,388   Recent
    Developments
  Issuance of 3.125% Convertible
    Notes.
  Repurchase of Common Stock.
 25




---



##### 



Tender Offer for Conversion of 2.875% Convertible
    Notes.
  Spectrum Acquisitions.
  Brazil Syndicated Loan Facility.
  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.   26




---



##### 



Form 10-K.
  Ratio
    of Earnings to Fixed Charges
  Three MonthsEndedSeptember 30,2007

20063.67x


3.70x
     
    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
       27




---



##### 



a.
    Consolidated  % of





% ofConsolidated





Consolidated


Change fromSeptember 30,


Operating


September 30,


Operating


Previous Year2007


Revenues


2006


Revenues


Dollars


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

$
2,275,370



97
%

$
1,630,291



96
%

$
645,079



40
%Digital handset and accessory revenues


76,826



3
%


69,995



4
%


6,831



10
%2,352,196



100
%


1,700,286



100
%


651,910



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


(630,253
)


(27
)%


(438,724
)


(26
)%


(191,529
)


44
%Cost of digital handsets and accessories


(300,182
)


(13
)%


(228,957
)


(13
)%


(71,225
)


31
%Selling and marketing expenses


(312,380
)


(13
)%


(234,466
)


(14
)%


(77,914
)


33
%General and administrative expenses


(459,128
)


(20
)%


(331,730
)


(20
)%


(127,398
)


38
%Depreciation and amortization


(216,917
)


(9
)%


(137,098
)


(8
)%


(79,819
)


58
%Operating income


433,336



18
%


329,311



19
%


104,025



32
%Interest expense, net


(89,592
)


(4
)%


(66,103
)


(4
)%


(23,489
)


36
%Interest income


48,996



2
%


38,997



2
%


9,999



26
%Foreign currency transaction gains (losses), net


12,637



1
%


(801
)






13,438



NMDebt conversion expense


(26,455
)


(1
)%










(26,455
)


NMOther expense, net


(986
)






(7,275
)






6,289



(86
)%Income before income tax provision


377,936



16
%


294,129



17
%


83,807



28
%Income tax provision


(128,026
)


(5
)%


(107,540
)


(6
)%


(20,486
)


19
%Net income

$
249,910



11
%

$
186,589



11
%

$
63,321



34
% 28




---



##### 



% of





% ofConsolidated





Consolidated


Change fromSeptember 30,


Operating


September 30,


Operating


Previous Year2007


Revenues


2006


Revenues


Dollars


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

$
826,006



97
%

$
590,086



96
%

$
235,920



40
%Digital handset and accessory revenues


26,917



3
%


25,500



4
%


1,417



6
%852,923



100
%


615,586



100
%


237,337



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


(231,313
)


(27
)%


(159,562
)


(26
)%


(71,751
)


45
%Cost of digital handsets and accessories


(104,370
)


(12
)%


(88,801
)


(14
)%


(15,569
)


18
%Selling and marketing expenses


(115,602
)


(14
)%


(88,330
)


(14
)%


(27,272
)


31
%General and administrative expenses


(166,458
)


(19
)%


(120,876
)


(20
)%


(45,582
)


38
%Depreciation and amortization


(77,221
)


(9
)%


(52,402
)


(9
)%


(24,819
)


47
%Operating income


157,959



19
%


105,615



17
%


52,344



50
%Interest expense, net


(35,610
)


(4
)%


(23,656
)


(4
)%


(11,954
)


51
%Interest income


23,838



2
%


13,259



2
%


10,579



80
%Foreign currency transaction gains, net


6,838



1
%


2,682



1
%


4,156



155
%Debt conversion expense


(26,455
)


(3
)%










(26,455
)


NMOther expense, net


(1,619
)






(1,687
)






68



(4
)%Income before income tax provision


124,951



15
%


96,213



16
%


28,738



30
%Income tax provision


(43,285
)


(5
)%


(30,525
)


(5
)%


(12,760
)


42
%Net income

$
81,666



10
%

$
65,688



11
%

$
15,978



24
%     NM-Not Meaningful
   29




---



##### 



1.
    Operating
    revenues    2.
    Cost of
    revenues    
    $107.5 million, or 49%, and $37.9 million, or 46%,
    increases in consolidated interconnect costs resulting from 35%
    and 31% 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
    interconnection costs;
    $45.8 million, or 32%, and $17.5 million, or 35%,
    increases in consolidated direct switch and transmitter and
    receiver site costs resulting from a 21% increase in the total
    number of consolidated transmitter and receiver sites in service
    from September 30, 2006 to September 30, 2007 and
    increases in costs per site; and
    $26.6 million, or 43%, and $10.9 million, or 50%,
    increases in consolidated service and repair costs mainly
    resulting from increases in subscribers participating under our
    handset maintenance programs.    3.
    Selling and
    marketing expenses    
    $30.5 million, or 32%, and $11.6 million, or 32%,
    increases in consolidated indirect commissions resulting from
    38% and 27% increases in total handset sales through external
    sales channels;
    $29.6 million, or 36%, and $10.5 million, or 35%,
    increases in consolidated payroll expenses and direct
    commissions resulting from 45% and 38% increases in total
    handset sales by internal sales personnel; and
    $15.1 million, or 32%, and $4.1 million, or 22%,
    increases in consolidated advertising expenses, primarily in
    Brazil, mainly related to Nextel Brazils sponsorship of
    the Copa Nextel Stock Car series, a professional racecar event,
    and increased advertising initiatives related to overall
    subscriber growth.   30




---



##### 



4.
    General and
    administrative expenses    
    $42.7 million, or 27%, and $12.1 million, or 21%,
    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;
    $38.3 million, or 48%, and $14.3 million, or 49%,
    increases in consolidated customer care expenses, mainly payroll
    and related expenses, resulting from additional customer care
    personnel necessary to support a larger customer base;
    $18.6 million, or 83%, and $9.6 million, or 103%,
    increases in stock option compensation expense, primarily
    resulting from grants of stock options in April 2006 and April
    2007;
    $11.4 million, or 52%, and $4.4 million, or 62%,
    increases in consolidated bad debt expense, primarily in Mexico,
    as a result of the 38% and 39% increases in consolidated
    operating revenues. Bad debt expense as a percentage of
    consolidated operating revenues increased from 1.28% for the
    nine months ended September 30, 2006 to 1.41% for the same
    period in 2007 and from 1.14% for the three months ended
    September 30, 2006 to 1.34% for the same period in 2007. We
    expect bad debt as a percentage of consolidated operating
    revenues to remain relatively stable at its current levels for
    the remainder of 2007; and
    $10.0 million, or 31%, and $3.7 million, or 33%,
    increases in information technology repair and maintenance costs
    primarily in Mexico and Brazil related to the expansion of their
    digital mobile networks.  5.
    Depreciation
    and amortization    6.
    Interest
    expense, net    
    $12.5 million and $9.4 million in incremental interest
    expense incurred on our 3.125% convertible notes that we issued
    in May 2007;
    $7.0 million and $2.6 million increases 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; and
    $6.5 million and $2.2 million decreases in capitalized
    interest related to a significant decline in average
    construction-in-progress
    balances, primarily in Mexico due to the substantial completion
    of our expansion plan; partially offset by
    $4.0 million and $2.4 million decreases in interest
    expense due to the conversion of our 3.5% notes and
    2.875% notes.  7.
    Interest
    income   31




---



##### 



8.
    Foreign
    currency transaction gains, net      9.
    Other
    expense, net    10.
    Income tax
    provision    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, 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


595,565



25
%


(254,211
)


27
%


(199,735
)


26
%


141,619Nextel 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

$
2,352,196



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


223,214



26
%


(95,961
)


28
%


(77,246
)


27
%


50,007Nextel 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

$
852,923



100
%

$
(335,683
)


100
%

$
(282,060
)


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, 2006

Revenues


Revenues


Revenues


Revenues


Expenses


Expenses


(Losses)(dollars in thousands)Nextel Mexico

$
963,968



57
%

$
(324,136
)


49
%

$
(264,115
)


47
%

$
375,717Nextel Brazil


383,570



23
%


(175,977
)


26
%


(131,465
)


23
%


76,128Nextel Argentina


247,372



14
%


(112,604
)


17
%


(62,817
)


11
%


71,951Nextel Peru


104,055



6
%


(54,394
)


8
%


(31,172
)


6
%


18,489Corporate and other


1,890







(1,139
)






(76,627
)


13
%


(75,876
)Intercompany eliminations


(569
)






569















Total consolidated

$
1,700,286



100
%

$
(667,681
)


100
%

$
(566,196
)


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, 2006

Revenues


Revenues


Revenues


Revenues


Expenses


Expenses


(Losses)(dollars in thousands)Nextel Mexico

$
346,051



56
%

$
(122,005
)


49
%

$
(97,009
)


46
%

$
127,037Nextel Brazil


141,833



23
%


(64,244
)


26
%


(47,516
)


23
%


30,073Nextel Argentina


89,787



15
%


(41,739
)


17
%


(22,861
)


11
%


25,187Nextel Peru


37,592



6
%


(20,178
)


8
%


(11,521
)


6
%


5,893Corporate and other


521







(395
)






(30,299
)


14
%


(30,173
)Intercompany eliminations


(198
)






198















Total consolidated

$
615,586



100
%

$
(248,363
)


100
%

$
(209,206
)


100
%  33




---



##### 



Exchange
    Rate Summary
    Nine Months Ended September 30,2007


2006


Percent ChangeMexican peso


10.95



10.90



(0.5
)%Brazilian real


2.00



2.18



9.0
%Argentine peso


3.11



3.07



(1.3
)%   Three Months Ended September 30,2007


2006


Percent ChangeMexican peso


10.96



10.96



Brazilian real


1.92



2.17



13.0
%Argentine peso


3.14



3.09



(1.6
)%     b.
    Nextel
    Mexico  % of





% ofNextel





NextelMexicos





Mexicos


Change fromSeptember 30,


Operating


September 30,


Operating


Previous Year2007


Revenues


2006


Revenues


Dollars


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

$
1,280,982



99
%

$
946,500



98
%

$
334,482



35
%Digital handset and accessory revenues


18,093



1
%


17,468



2
%


625



4
%1,299,075



100
%


963,968



100
%


335,107



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


(270,433
)


(21
)%


(198,714
)


(21
)%


(71,719
)


36
%Cost of digital handsets and accessories


(183,403
)


(14
)%


(125,422
)


(13
)%


(57,981
)


46
%(453,836
)


(35
)%


(324,136
)


(34
)%


(129,700
)


40
%Selling and marketing expenses


(184,160
)


(14
)%


(146,023
)


(15
)%


(38,137
)


26
%General and administrative expenses


(169,523
)


(13
)%


(118,092
)


(12
)%


(51,431
)


44
%Segment earnings


491,556



38
%


375,717



39
%


115,839



31
%Management fee


(29,700
)


(2
)%










(29,700
)


NMDepreciation and amortization


(106,788
)


(9
)%


(72,352
)


(8
)%


(34,436
)


48
%Operating income


355,068



27
%


303,365



31
%


51,703



17
%Interest expense, net


(44,765
)


(3
)%


(27,421
)


(3
)%


(17,344
)


63
%Interest income


20,948



2
%


24,697



3
%


(3,749
)


(15
)% 34




---



##### 



% of





% ofNextel





NextelMexicos





Mexicos


Change fromSeptember 30,


Operating


September 30,


Operating


Previous Year2007


Revenues


2006


Revenues


Dollars


Percent(dollars in thousands)Foreign currency transaction gains (losses), net


899







(823
)






1,722



(209
)%Other income (expense), net


2,183







(2,116
)






4,299



(203
)%Income before income tax

$
334,333



26
%

$
297,702



31
%

$
36,631



12
%Three Months EndedOperating revenuesService and other revenues

$
458,665



98
%

$
341,203



99
%

$
117,462



34
%Digital handset and accessory revenues


7,445



2
%


4,848



1
%


2,597



54
%466,110



100
%


346,051



100
%


120,059



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


(98,657
)


(21
)%


(71,546
)


(21
)%


(27,111
)


38
%Cost of digital handsets and accessories


(61,490
)


(13
)%


(50,459
)


(14
)%


(11,031
)


22
%(160,147
)


(34
)%


(122,005
)


(35
)%


(38,142
)


31
%Selling and marketing expenses


(66,200
)


(14
)%


(55,143
)


(16
)%


(11,057
)


20
%General and administrative expenses


(59,147
)


(13
)%


(41,866
)


(12
)%


(17,281
)


41
%Segment earnings


180,616



39
%


127,037



37
%


53,579



42
%Management fee


(9,900
)


(2
)%










(9,900
)


NMDepreciation and amortization


(38,574
)


(9
)%


(27,533
)


(8
)%


(11,041
)


40
%Operating income


132,142



28
%


99,504



29
%


32,638



33
%Interest expense, net


(15,453
)


(3
)%


(10,542
)


(3
)%


(4,911
)


47
%Interest income


8,039



2
%


8,702



2
%


(663
)


(8
)%Foreign currency transaction (losses) gains, net


(309
)






2,719



1
%


(3,028
)


(111
)%Other (expense) income, net


(77
)






178







(255
)


(143
)%Income before income tax

$
124,342



27
%

$
100,561



29
%

$
23,781



24
%     NM-Not Meaningful
   35




---



##### 



1.
    Operating
    revenues    2.
    Cost of
    revenues    
    $39.2 million, or 43%, and $13.8 million, or 41%,
    increases in interconnect costs generally resulting from 36% and
    28% 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; 36




---



##### 




    $16.0 million, or 22%, and $5.5 million, or 21%,
    increases in direct switch and transmitter and receiver site
    costs resulting from a 20% increase in the number of transmitter
    and receiver sites in service from September 30, 2006 to
    September 30, 2007; and
    $10.9 million, or 39%, and $5.0 million, or 51%,
    increases in service and repair costs largely due to increased
    activity under Nextel Mexicos handset maintenance program.    3.
    Selling and
    marketing expenses    
    $17.8 million, or 26%, and $6.7 million, or 26%,
    increases in indirect commissions primarily due to 37% and 16%
    increases in handset sales by Nextel Mexicos
    dealers; and
    $13.7 million, or 34%, and $4.4 million, or 30%,
    increases in direct commissions and payroll expenses principally
    due to 63% and 41% 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.      4.
    General and
    administrative expenses    
    $22.4 million, or 57%, and $7.5 million, or 51%,
    increases 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;
    $17.6 million, or 34%, and $5.3 million, or 28%,
    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
    $8.4 million, or 74%, and $3.2 million, or 89%,
    increases in bad debt expense. Bad debt as a percentage of
    revenue increased from 1.18% for the nine months ended
    September 30, 2006 to 1.52% for the same period in 2007 and
    from 1.03% for the three months ended September 30, 2006 to
    1.44% for the same period in 2007. These increases resulted
    primarily from the introduction of certain rate plans that are
    available to customers with higher credit risk. We expect bad
    debt as a percent of revenue to remain relatively stable through
    the remainder of 2007.  5.
    Management
    fee   37




---



##### 



6.
    Depreciation
    and amortization    7.
    Interest
    expense, net  construction-in-progress
  8.
    Foreign
    currency transaction gains (losses), net    9.
    Other income
    (expense), net    c.
    Nextel
    Brazil  % of





% ofNextel





NextelBrazils





Brazils


Change fromSeptember 30,


Operating


September 30,


Operating


Previous Year2007


Revenues


2006


Revenues


Dollars


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

$
570,308



96
%

$
354,863



93
%

$
215,445



61
%Digital handset and accessory revenues


25,257



4
%


28,707



7
%


(3,450
)


(12
)%595,565



100
%


383,570



100
%


211,995



55
%Cost of revenuesCost of service (exclusive of depreciation and amortization
    included below)


(198,525
)


(33
)%


(122,911
)


(32
)%


(75,614
)


62
%Cost of digital handsets and accessories


(55,686
)


(10
)%


(53,066
)


(14
)%


(2,620
)


5
%(254,211
)


(43
)%


(175,977
)


(46
)%


(78,234
)


44
%Selling and marketing expenses


(81,976
)


(13
)%


(50,328
)


(13
)%


(31,648
)


63
%General and administrative expenses


(117,759
)


(20
)%


(81,137
)


(21
)%


(36,622
)


45
% 38




---



##### 



% of





% ofNextel





NextelBrazils





Brazils


Change fromSeptember 30,


Operating


September 30,


Operating


Previous Year2007


Revenues


2006


Revenues


Dollars


Percent(dollars in thousands)Segment earnings


141,619



24
%


76,128



20
%


65,491



86
%Depreciation and amortization


(67,734
)


(12
)%


(40,671
)


(11
)%


(27,063
)


67
%Operating income


73,885



12
%


35,457



9
%


38,428



108
%Interest expense, net


(22,221
)


(4
)%


(17,857
)


(5
)%


(4,364
)


24
%Interest income


4,457



1
%


2,480



1
%


1,977



80
%Foreign currency transaction gains (losses), net


10,041



2
%


(338
)






10,379



NMOther expense, net


(3,162
)






(4,567
)


(1
)%


1,405



(31
)%Income before income tax

$
63,000



11
%

$
15,175



4
%

$
47,825



NMThree Months EndedOperating revenuesService and other revenues

$
215,683



97
%

$
130,526



92
%

$
85,157



65
%Digital handset and accessory revenues


7,531



3
%


11,307



8
%


(3,776
)


(33
)%223,214



100
%


141,833



100
%


81,381



57
%Cost of revenuesCost of service (exclusive of depreciation and amortization
    included below)


(75,229
)


(34
)%


(45,126
)


(32
)%


(30,103
)


67
%Cost of digital handsets and accessories


(20,732
)


(9
)%


(19,118
)


(13
)%


(1,614
)


8
%(95,961
)


(43
)%


(64,244
)


(45
)%


(31,717
)


49
%Selling and marketing expenses


(32,356
)


(15
)%


(18,971
)


(14
)%


(13,385
)


71
%General and administrative expenses


(44,890
)


(20
)%


(28,545
)


(20
)%


(16,345
)


57
%Segment earnings


50,007



22
%


30,073



21
%


19,934



66
%Depreciation and amortization


(25,077
)


(11
)%


(15,144
)


(11
)%


(9,933
)


66
%Operating income


24,930



11
%


14,929



10
%


10,001



67
%Interest expense, net


(7,879
)


(4
)%


(6,248
)


(4
)%


(1,631
)


26
%Interest income


1,667



1
%


895







772



86
%Foreign currency transaction gains (losses), net


5,802



3
%


(66
)






5,868



NMOther expense, net


(1,608
)


(1
)%


(1,831
)


(1
)%


223



(12
)%Income before income tax

$
22,912



10
%

$
7,679



5
%

$
15,233



198
%     NM-Not Meaningful
   39




---



##### 



1.
    Operating
    revenues      2.
    Cost of
    revenues    
    $47.8 million, or 82%, and $19.4 million, or 87%,
    increases in interconnect costs resulting from 50% and 49%
    increases in interconnect minutes of use, as well as increases
    in the proportion of mobile-to-mobile minutes of use, which
    generally have higher per minute costs;
    $20.8 million, or 46%, and $8.2 million, or 52%,
    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 September 30, 2006 to September 30, 2007,
    as well as increases in operating and maintenance costs per
    site; and
    $3.7 million, or 28%, and $1.1 million, or 24%,
    increases in service and repair costs largely due to increased
    activity under Nextel Brazils handset maintenance program.    3.
    Selling and
    marketing expenses    
    $12.9 million, or 53%, and $5.0 million, or 58%,
    increases in payroll expenses and direct commissions largely as
    a result of 43% and 40% increases in handset sales by Nextel
    Brazils internal sales force, as well as 49% increases in
    selling and marketing personnel necessary to support continued
    sales growth; 40




---



##### 




    $9.3 million, or 84%, and $4.5 million, or 98%,
    increases in advertising expenses resulting from the launch of
    new markets in connection with Nextel Brazils expansion
    plan, its 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; and
    $9.0 million, or 70%, and $3.6 million, or 72%,
    increases in indirect commissions resulting from 47% and 52%
    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.  4.
    General and
    administrative expenses    
    $12.5 million, or 60%, and $5.2 million, or 70%,
    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 55% and 57%
    increases in Nextel Brazils operating revenues;
    $10.9 million, or 46%, and $4.9 million, or 57%,
    increases in customer care expenses resulting from 35% increases
    in customer care personnel for both periods necessary to support
    a larger customer base, as well as increases in various
    facilities expenses;
    $8.0 million, or 38%, and $3.8 million, or 51%,
    increases in general corporate and facilities costs primarily
    resulting from an increase in general and administrative
    personnel necessary to support Nextel Brazils
    expansion; and
    $3.6 million, or 53%, and $1.3 million, or 53%,
    increases in information technology expenses related to Nextel
    Brazils systems infrastructure as a result of its growing
    subscriber base.  5.
    Depreciation
    and amortization    6.
    Interest
    expense, net    7.
    Foreign
    currency transaction gains (losses), net   41




---



##### 



d.
    Nextel
    Argentina  % of





% ofNextel





NextelArgentinas





Argentinas


Change fromSeptember 30,


Operating


September 30,


Operating


Previous Year2007


Revenues


2006


Revenues


Dollars


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

$
293,538



92
%

$
229,629



93
%

$
63,909



28
%Digital handset and accessory revenues


24,270



8
%


17,743



7
%


6,527



37
%317,808



100
%


247,372



100
%


70,436



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


(110,038
)


(34
)%


(80,150
)


(33
)%


(29,888
)


37
%Cost of digital handsets and accessories


(37,708
)


(12
)%


(32,454
)


(13
)%


(5,254
)


16
%(147,746
)


(46
)%


(112,604
)


(46
)%


(35,142
)


31
%Selling and marketing expenses


(24,128
)


(8
)%


(19,988
)


(8
)%


(4,140
)


21
%General and administrative expenses


(45,057
)


(14
)%


(42,829
)


(17
)%


(2,228
)


5
%Segment earnings


100,877



32
%


71,951



29
%


28,926



40
%Depreciation and amortization


(22,505
)


(7
)%


(13,203
)


(5
)%


(9,302
)


70
%Operating income


78,372



25
%


58,748



24
%


19,624



33
%Interest expense, net


(1,904
)






(2,118
)


(1
)%


214



(10
)%Interest income


3,417



1
%


1,765



1
%


1,652



94
%Foreign currency transaction gains, net


1,301







394







907



230
%Other income, net


1,586







319







1,267



NMIncome before income tax

$
82,772



26
%

$
59,108



24
%

$
23,664



40
% 42




---



##### 



% of





% ofNextel





NextelArgentinas





Argentinas


Change fromSeptember 30,


Operating


September 30,


Operating


Previous Year2007


Revenues


2006


Revenues


Dollars


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

$
105,437



92
%

$
82,685



92
%

$
22,752



28
%Digital handset and accessory revenues


8,616



8
%


7,102



8
%


1,514



21
%114,053



100
%


89,787



100
%


24,266



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


(39,318
)


(34
)%


(28,520
)


(32
)%


(10,798
)


38
%Cost of digital handsets and accessories


(13,154
)


(12
)%


(13,219
)


(15
)%


65



(52,472
)


(46
)%


(41,739
)


(47
)%


(10,733
)


26
%Selling and marketing expenses


(8,997
)


(8
)%


(7,173
)


(8
)%


(1,824
)


25
%General and administrative expenses


(15,534
)


(14
)%


(15,688
)


(17
)%


154



(1
)%Segment earnings


37,050



32
%


25,187



28
%


11,863



47
%Depreciation and amortization


(7,637
)


(6
)%


(5,708
)


(6
)%


(1,929
)


34
%Operating income


29,413



26
%


19,479



22
%


9,934



51
%Interest expense, net


(780
)


(1
)%


(669
)


(1
)%


(111
)


17
%Interest income


1,380



1
%


651



1
%


729



112
%Foreign currency transaction gains (losses), net


995



1
%


(11
)






1,006



NMOther income, net


9







90







(81
)


(90
)%Income before income tax

$
31,017



27
%

$
19,540



22
%

$
11,477



59
%     NM-Not Meaningful
    1.
    Operating
    revenues    
    28% and 27% increases in the average number of digital handsets
    in service, resulting primarily from growth in Nextel
    Argentinas existing markets; and 43




---



##### 




    $8.1 million, or 35%, and $3.2 million, or 39%,
    increases in revenues generated from Nextel Argentinas
    handset maintenance program due to growth in the number of
    Nextel Argentinas customers that are utilizing this
    program.    2.
    Cost of
    revenues    
    $12.4 million, or 28%, and $3.7 million, or 22%,
    increases in interconnect costs largely as a result of 19% and
    18% 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;
    $11.0 million, or 66%, and $4.4 million, or 78%,
    increases in service and repair costs largely due to increased
    activity under Nextel Argentinas handset maintenance
    program; and
    $5.5 million, or 30%, and $2.2 million, or 37%,
    increases in direct switch and transmitter and receiver site
    costs, including spectrum license fees, due to a 19% increase in
    the number of transmitter and receiver sites in service from
    September 30, 2006 to September 30, 2007, as well as
    increases in rental costs and municipal taxes per site.    3.
    Selling and
    marketing expenses    
    $2.7 million, or 31%, and $1.0 million, or 31%,
    increases in indirect commissions principally resulting from 29%
    and 22% increases in handset sales obtained through Nextel
    Argentinas external sales channels, as well as an increase
    in indirect commissions earned per handset sale; and
    $1.0 million, or 13%, and $0.7 million, or 25%,
    increases in direct commissions and payroll expenses principally
    resulting from 14% and 10% increases in handset sales by Nextel
    Argentinas sales personnel.  4.
    General and
    administrative expenses    5.
    Depreciation
    and amortization   44




---



##### 



e.
    Nextel
    Peru  % of





% ofNextel





NextelPerus





Perus


Change fromSeptember 30,


Operating


September 30,


Operating


Previous Year2007


Revenues


2006


Revenues


Dollars


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

$
128,947



93
%

$
97,978



94
%

$
30,969



32
%Digital handset and accessory revenues


9,201



7
%


6,077



6
%


3,124



51
%138,148



100
%


104,055



100
%


34,093



33
%Cost of revenuesCost of service (exclusive of depreciation and amortization
    included below)


(50,326
)


(37
)%


(36,382
)


(35
)%


(13,944
)


38
%Cost of digital handsets and accessories


(22,530
)


(16
)%


(18,012
)


(17
)%


(4,518
)


25
%(72,856
)


(53
)%


(54,394
)


(52
)%


(18,462
)


34
%Selling and marketing expenses


(14,905
)


(11
)%


(12,788
)


(12
)%


(2,117
)


17
%General and administrative expenses


(24,368
)


(17
)%


(18,384
)


(18
)%


(5,984
)


33
%Segment earnings


26,019



19
%


18,489



18
%


7,530



41
%Depreciation and amortization


(15,202
)


(11
)%


(8,421
)


(8
)%


(6,781
)


81
%Operating income


10,817



8
%


10,068



10
%


749



7
%Interest expense, net


(95
)






(106
)






11



(10
)%Interest income


499







850



1
%


(351
)


(41
)%Foreign currency transaction gains, net


371







80







291



NMIncome before income tax

$
11,592



8
%

$
10,892



11
%

$
700



6
% 45




---



##### 



% of





% ofNextel





NextelPerus





Perus


Change fromSeptember 30,


Operating


September 30,


Operating


Previous Year2007


Revenues


2006


Revenues


Dollars


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

$
45,457



93
%

$
35,349



94
%

$
10,108



29
%Digital handset and accessory revenues


3,320



7
%


2,243



6
%


1,077



48
%48,777



100
%


37,592



100
%


11,185



30
%Cost of revenuesCost of service (exclusive of depreciation and amortization
    included below)


(17,691
)


(36
)%


(14,176
)


(38
)%


(3,515
)


25
%Cost of digital handsets and accessories


(8,699
)


(18
)%


(6,002
)


(16
)%


(2,697
)


45
%(26,390
)


(54
)%


(20,178
)


(54
)%


(6,212
)


31
%Selling and marketing expenses


(5,582
)


(11
)%


(4,944
)


(13
)%


(638
)


13
%General and administrative expenses


(8,659
)


(18
)%


(6,577
)


(18
)%


(2,082
)


32
%Segment earnings


8,146



17
%


5,893



15
%


2,253



38
%Depreciation and amortization


(4,318
)


(9
)%


(3,078
)


(8
)%


(1,240
)


40
%Operating income


3,828



8
%


2,815



7
%


1,013



36
%Interest expense, net


(28
)






(34
)






6



(18
)%Interest income


158







290



1
%


(132
)


(46
)%Foreign currency transaction gains, net


316



1
%


30







286



NMIncome before income tax

$
4,274



9
%

$
3,101



8
%

$
1,173



38
%     NM-Not Meaningful
  1.
    Operating
    revenues      2.
    Cost of
    revenues    
    $8.9 million, or 38%, and $1.6 million, or 17%,
    increases in interconnect costs largely as a result of 30% and
    17% increases in interconnect minutes of use; and 46




---



##### 




    $2.5 million, or 29%, and $0.8 million, or 28%,
    increases in direct switch and transmitter and receiver site
    costs due to a 14% increase in the number of transmitter and
    receiver sites in service from September 30, 2006 to
    September 30, 2007, as well as increases in operating and
    maintenance costs per site.    3.
    Selling and
    marketing expenses    4.
    General and
    administrative expenses    
    $2.1 million, or 31%, and $0.8 million, or 33%,
    increases in general corporate costs due to increases in general
    and administrative personnel necessary to support Nextel
    Perus expanding business; and
    $1.6 million, or 22%, and $0.6 million, or 23%,
    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.  5.
    Depreciation
    and amortization   47




---



##### 



f.
    Corporate
    and other  % of





% ofCorporate





Corporateand other





and other


Change fromSeptember 30,


Operating


September 30,


Operating


Previous Year2007


Revenues


2006


Revenues


Dollars


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

$
2,454



100
%

$
1,890



100
%

$
564



30
%Digital handset and accessory revenues


5















5



NM2,459



100
%


1,890



100
%


569



30
%Cost of revenuesCost of service (exclusive of depreciation and amortization
    included below)


(1,790
)


(73
)%


(1,136
)


(60
)%


(654
)


58
%Cost of digital handsets and accessories


(855
)


(35
)%


(3
)






(852
)


NM(2,645
)


(108
)%


(1,139
)


(60
)%


(1,506
)


132
%Selling and marketing expenses


(7,211
)


293
%


(5,339
)


(282
)%


(1,872
)


35
%General and administrative expenses


(102,421
)


NM



(71,288
)


NM



(31,133
)


44
%Segment losses


(109,818
)


NM



(75,876
)


NM



(33,942
)


45
%Management fee


29,700



NM











29,700



NMDepreciation and amortization


(4,983
)


(203
)%


(2,746
)


(145
)%


(2,237
)


81
%Operating loss


(85,101
)


NM



(78,622
)


NM



(6,479
)


8
%Interest expense, net


(28,403
)


NM



(18,672
)


NM



(9,731
)


52
%Interest income


27,471



NM



9,276



NM



18,195



196
%Foreign currency transaction gains (losses), net


25



1
%


(114
)


(6
)%


139



(122
)%Debt conversion expense


(26,455
)


NM











(26,455
)


NMOther expense, net


(1,593
)


(65
)%


(911
)


(48
)%


(682
)


75
%Loss before income tax

$
(114,056
)


NM


$
(89,043
)


NM


$
(25,013
)


28
% 48




---



##### 



% of





% ofCorporate





Corporateand other





and other


Change fromSeptember 30,


Operating


September 30,


Operating


Previous Year2007


Revenues


2006


Revenues


Dollars


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

$
1,072



100
%

$
521



100
%

$
551



106
%Digital handset and accessory revenues


5















5



NM1,077



100
%


521



100
%


556



107
%Cost of revenuesCost of service (exclusive of depreciation and amortization
    included below)


(726
)


(68
)%


(392
)


(75
)%


(334
)


85
%Cost of digital handsets and accessories


(295
)


(27
)%


(3
)


(1
)%


(292
)


NM(1,021
)


(95
)%


(395
)


(76
)%


(626
)


158
%Selling and marketing expenses


(2,467
)


(229
)%


(2,099
)


NM



(368
)


18
%General and administrative expenses


(38,228
)


NM



(28,200
)


NM



(10,028
)


36
%Segment losses


(40,639
)


NM



(30,173
)


NM



(10,466
)


35
%Management fee


9,900



NM











9,900



NMDepreciation and amortization


(1,713
)


(159
)%


(1,037
)


(199
)%


(676
)


65
%Operating loss


(32,452
)


NM



(31,210
)


NM



(1,242
)


4
%Interest expense, net


(14,068
)


NM



(6,187
)


NM



(7,881
)


127
%Interest income


15,192



NM



2,745



NM



12,447



NMForeign currency transaction gains, net


33



3
%


10



2
%


23



230
%Debt conversion expense


(26,455
)


NM











(26,455
)


NMOther income (expense), net


58



5
%


(124
)


(24
)%


182



(147
)%Loss before income tax

$
(57,692
)


NM


$
(34,766
)


NM


$
(22,926
)


66
%     NM-Not Meaningful
  start-up
  1.
    General and
    administrative expenses   49




---



##### 



2.
    Management
    fee    3.
    Interest
    expense, net    4.
    Interest
    income    5.
    Debt
    conversion expense    Liquidity
    and Capital Resources
      Cash
    Flows
  Nine Months Ended


Change fromSeptember 30,


Previous Year2007


2006


DollarsNet cash provided by operating activities

$
455,195


$
318,188


$
137,007Net cash used in investing activities


(554,619
)


(624,427
)


69,808Net cash provided by financing activities


936,587



103,352



833,235Effect of exchange rate changes on cash and cash equivalents


(351
)


(6,394
)


6,043Net increase (decrease) in cash and cash equivalents


836,812



(209,281
)


1,046,093Cash and cash equivalents, beginning of period


708,591



877,536



(168,945
)Cash and cash equivalents, end of period

$
1,545,403


$
668,255


$
877,148    50




---



##### 



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. 51




---



##### 



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


$
1,294,250


$
475,170


$
1,910,795Tower financing obligations(1)


43,949



87,917



87,950



266,922



486,738Syndicated loan facilities(2)


62,509



119,717



166,254







348,480Capital lease obligations(3)


12,136



25,124



23,872



101,937



163,069Spectrum fees(4)


13,836



27,672



27,672



169,492



238,672Spectrum license financing(5)


2,042



4,083



4,083



2,041



12,249Operating leases(6)


123,065



200,776



130,831



149,589



604,261Purchase obligations(7)


559,280



53,769



33,120







646,169Other long-term obligations(8)


9,764



19,495



17,647



165,690



212,596Total contractual commitments

$
873,706


$
632,803


$
1,785,679


$
1,330,841


$
4,623,029     (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.(2)
    
    These amounts do not include principal and interest payments
    associated with Nextel Brazils $300.0 million
    syndicated loan facility as no amounts were borrowed under this
    facility as of September 30, 2007.(3)
    
    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.(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 represent payments related to spectrum license
    financing in Brazil.(6)
    
    These amounts principally include future lease costs related to
    our transmitter and receiver sites and switches and office
    facilities.(7)
    
    These amounts include maximum contractual purchase obligations
    under various agreements with our vendors, as well as estimated
    payments related to spectrum obligations in Argentina.(8)
    
    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.
 52




---



##### 




    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 of the major market areas in which we currently operate;
    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.
    
    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.    
    changes in technology or our spectrum holdings;
    our decision to expand into new markets or further in our
    existing markets;
    the construction of additional portions of our networks or the
    acquisition of competitors or others, 53




---



##### 




    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;
    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; 54




---



##### 




    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
     55




---



##### 



Item 3.
    Quantitative
    and Qualitative Disclosures About Market Risk.          
    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.    56




---



##### 



September 30,


December 31,Year of Maturity


2007


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$)

$
1,517


$
1,793


$
1,885


$
1,899


$
1,200,971


$
369,236


$
1,577,301


$
1,773,299


$
678,202


$
1,258,202Average Interest Rate


10.0
%


10.0
%


10.0
%


10.0
%


3.1
%


3.1
%


3.2
%






3.1
%Fixed Rate (MP)

$
27,332


$
40,703


$
23,436


$
6,322


$
7,486


$
95,169


$
200,448


$
200,448


$
189,867


$
189,867Average Interest Rate


12.1
%


11.9
%


12.5
%


16.5
%


16.5
%


16.2
%


14.5
%






14.4
%Fixed Rate (BR)

$
3,330


$
3,882


$
4,363


$
4,990


$
5,813


$
71,022


$
93,400


$
93,400


$
75,589


$
75,589Average Interest Rate


17.6
%


18.7
%


19.6
%


20.4
%


21.3
%


25.8
%


24.4
%






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)

$
16,163


$
24,867


$
12,435


$



$



$



$
53,465


$
53,465


$
57,423


$
57,423Average Interest Rate


8.7
%


8.7
%


8.7
%














8.7
%






8.5
%Interest Rate Swap:Variable to Fixed

$
8,541


$
13,140


$
6,569


$



$



$



$
28,250


$
(711
)

$
29,128


$
(1,406
)Average Pay Rate


10.8
%


10.8
%


10.8
%














10.8
%






10.8
%Average Receive Rate


8.7
%


8.7
%


8.7
%














8.7
%






8.5
%   Item 4.
    Controls
    and Procedures.  Evaluation
    of Disclosure Controls and Procedures
      Changes
    in Internal Control over Financial Reporting
   57




---



##### 



PART II 
    OTHER INFORMATION
  Item 1.
    Legal
    Proceedings.      Item 1A.
    Risk
    Factors.  Form 10-K.
  Item 6.
    Exhibits.  ExhibitNumber

Exhibit Description3
.1

Second Amended and Restated Bylaws of the Company (incorporated
    by reference to Exhibit 3.1 to NII Holdings
    Form 8-K,
    filed on October 29, 2007).10
.1

Term Facility Agreement A/B, dated as of September 14,
    2007, by and among Nextel Telecomunicacoes Ltda., Nederlandse
    Financierings-Maatschappij Voor Ontwikkelingslanden N.V., as
    lender, and Standard Bank Offshore Trust Company Jersey
    Limited, as Security Agent.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




---



##### 



SIGNATURE
    By:
    /s/  DANIEL E. FREIMAN        59




---



##### 



EXHIBIT INDEX
  ExhibitNumber

Exhibit Description3
.1

Second Amended and Restated Bylaws of the Company (incorporated
    by reference to Exhibit 3.1 to NII Holdings
    Form 8-K,
    filed on October 29, 2007).10
.1

Term Facility Agreement A/B, dated as of September 14,
    2007, by and among Nextel Telecomunicacoes Ltda., Nederlandse
    Financierings-Maatschappij Voor Ontwikkelingslanden N.V., as
    lender, and Standard Bank Offshore Trust Company Jersey
    Limited, as Security Agent.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.  60