##### 



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
    March 31, 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 May 1, 2007Common Stock, $0.001 par
    value per share

163,599,072




---



##### 



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


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


2Condensed Consolidated Statements
    of Operations and Comprehensive Income  For the Three
    Months Ended March 31, 2007 and 2006


3Condensed Consolidated Statement
    of Changes in Stockholders Equity  For the
    Three Months Ended March 31, 2007


4Condensed Consolidated Statements
    of Cash Flows  For the Three Months Ended
    March 31, 2007 and 2006


5Notes to Condensed Consolidated
    Financial Statements


6Item 2.


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


16Item 3.


Quantitative and Qualitative
    Disclosures About Market Risk


40Item 4.


Controls and Procedures


41Part II. Other
    Information.Item 1.


Legal Proceedings


42Item 1A.


Risk Factors


42Item 6.


Exhibits


42  1




---



##### 



PART I 
    FINANCIAL INFORMATION  Item 1.
    Financial
    Statements.  NII
    HOLDINGS, INC. AND SUBSIDIARIES
 CONDENSED
    CONSOLIDATED BALANCE SHEETS
    (in thousands, except par values)
    Unaudited  March 31,


December 31,2007


2006ASSETSCurrent assetsCash and cash equivalents

$
593,075


$
708,591Accounts receivable, less allowance
    for doubtful accounts of $16,886 and $15,928


318,240



298,470Handset and accessory inventory


105,837



70,247Deferred income taxes, net


55,156



60,450Prepaid expenses and other


106,186



71,376Total current assets


1,178,494



1,209,134Property, plant and equipment,net of accumulated
    depreciation of $539,215 and $474,520


1,492,814



1,389,150Intangible assets, net


376,417



369,196Deferred income taxes,
    net


173,478



186,867Other assets


172,704



143,331Total assets

$
3,393,907


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

$
95,013


$
107,687Accrued expenses and other


342,857



342,465Deferred revenues


87,986



83,952Accrued interest


7,079



11,703Current portion of long-term debt


23,563



23,294Total current liabilities


556,498



569,101Long-term debt


1,143,266



1,134,387Deferred revenues


35,350



36,156Deferred credits


106,309



110,033Other long-term
    liabilities


99,476



101,521Total liabilities


1,940,899



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,
    162,199 shares issued and outstanding  2007,
    161,814 shares issued and outstanding  2006


162



162Paid-in capital


755,489



723,644Retained earnings


709,545



630,538Accumulated other comprehensive loss


(12,188
)


(7,864
)Total stockholders equity


1,453,008



1,346,480Total liabilities and
    stockholders equity

$
3,393,907


$
3,297,678    2




---



##### 



NII
    HOLDINGS, INC. AND SUBSIDIARIES
  CONDENSED CONSOLIDATED STATEMENTS OF
    OPERATIONS
 AND COMPREHENSIVE INCOME
 (in thousands, except per share amounts)
 Unaudited
  Three Months Ended March 31,2007


2006Operating revenuesService and other revenues

$
690,683


$
505,956Digital handset and accessory
    revenues


22,924



22,315713,607



528,271Operating expensesCost of service (exclusive of
    depreciation and amortization included below)


188,895



134,350Cost of digital handset and
    accessory sales


91,083



69,801Selling, general and administrative


225,142



170,536Depreciation


65,364



40,210Amortization


1,644



1,264572,128



416,161Operating income


141,479



112,110Other income
    (expense)Interest expense, net


(24,329
)


(21,415
)Interest income


11,370



12,601Foreign currency transaction
    losses, net


(3,532
)


(1,141
)Other income (expense), net


1,827



(2,364
)(14,664
)


(12,319
)Income before income tax
    provision


126,815



99,791Income tax provision


(42,651
)


(34,793
)Net income

$
84,164


$
64,998Net income, per common share,
    basic

$
0.52


$
0.43Net income, per common share,
    diluted

$
0.47


$
0.38Weighted average number of
    common shares outstanding, basic


161,870



152,166Weighted average number of
    common shares outstanding, diluted


185,868



182,876Comprehensive income, net of
    income taxesForeign currency translation
    adjustment

$
(4,915
)

$
1,823Reclassification for losses on
    derivatives included in other income (expense), net


385



1,059Unrealized gains on derivatives,
    net


206



242Other comprehensive (loss) income


(4,324
)


3,124Net income


84,164



64,998Total comprehensive income

$
79,840


$
68,122    3




---



##### 



NII
    HOLDINGS, INC. AND SUBSIDIARIES
 CONDENSED
    CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS
    EQUITY
    For the Three Months Ended March 31, 2007
    (in thousands)
    Unaudited  AccumulatedOther


TotalCommon Stock


Paid-in


Retained


Comprehensive


StockholdersShares


Amount


Capital


Earnings


Loss


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














84,164







84,164Other comprehensive loss


















(4,324
)


(4,324
)Share-based payment expense










13,048











13,048Conversion of 2.75% notes to
    common stock










3











3Exercise of stock options


385







7,492











7,492Tax benefit on exercise of stock
    options










1,919











1,919Tax benefit of prior periods
    stock option exercises










9,383











9,383Balance, March 31,
    2007


162,199


$
162


$
755,489


$
709,545


$
(12,188
)

$
1,453,008    4




---



##### 



NII
    HOLDINGS, INC. AND SUBSIDIARIES
  CONDENSED CONSOLIDATED STATEMENTS OF CASH
    FLOWS
 For the Three Months Ended March 31, 2007 and 2006
 (in thousands)
 Unaudited
  2007


2006Cash flows from operating
    activities:Net income

$
84,164


$
64,998Adjustments to reconcile net income
    to net cash provided by operating activities:Amortization of debt financing costs


1,108



1,163Depreciation and amortization


67,008



41,474Provision for losses on accounts
    receivable


10,114



7,439Losses on derivative instruments


499



1,492Foreign currency transaction
    losses, net


3,532



1,141Deferred income tax provision


18,042



10,693Utilization of deferred credit


(1,886
)


(2,218
)Share-based payment expense


13,199



6,580Excess tax benefit from share-based
    payment


(1,818
)


(5,177
)Loss on disposal of property, plant
    and equipment


750



237Accretion of asset retirement
    obligations


1,372



708Other, net


(231
)


601Change in assets and liabilities:Accounts receivable, gross


(29,659
)


(13,994
)Handset and accessory inventory


(36,170
)


(267
)Prepaid expenses and other


(35,079
)


(9,917
)Other long-term assets


(27,913
)


(16,300
)Accounts payable, accrued expenses
    and other


(8,503
)


(10,196
)Current deferred revenue


4,310



4,387Other long-term liabilities


1,792



1,697Net cash provided by operating
    activities


64,631



84,541Cash flows from investing
    activities:Capital expenditures


(171,997
)


(107,792
)Payments for acquisitions,
    purchases of licenses and other


(13,917
)


(886
)Other


751



(93
)Net cash used in investing
    activities


(185,163
)


(108,771
)Cash flows from financing
    activities:Proceeds from stock option exercises


7,492



695Proceeds from tower financing
    transactions


2,929



410Repayments under capital leases and
    tower financing transactions


(1,233
)


(1,001
)Excess tax benefit from share-based
    payment


1,818



5,177Net cash provided by financing
    activities


11,006



5,281Effect of exchange rate changes
    on cash and cash equivalents


(5,990
)


(4,851
)Net decrease in cash and cash
    equivalents


(115,516
)


(23,800
)Cash and cash equivalents,
    beginning of period


708,591



877,536Cash and cash equivalents, end
    of period

$
593,075


$
853,736    5




---



##### 



NII
    HOLDINGS, INC. AND SUBSIDIARIES
  NOTES TO CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS
  Unaudited
  Note 1.
    Basis of
    Presentation  General.
  Form 10-K.
  Accumulated Other Comprehensive
    Loss.
  March 31,


December 31,2007


2006(in thousands)Cumulative foreign currency
    translation adjustment

$
(9,835
)

$
(4,920
)Unrealized losses on derivatives


(2,353
)


(2,944
)$
(12,188
)

$
(7,864
)   Supplemental
    Cash Flow Information.
  Three Months Ended March 31,2007


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

$
171,997


$
107,792Changes in capital expenditures
    accrued and unpaid or financed


(4,475
)


21,063$
167,522


$
128,855Interest
    costsInterest expense

$
24,329


$
21,415Interest capitalized


1,702



3,166$
26,031


$
24,581Cash paid for interest, net of
    amounts capitalized

$
22,393


$
20,796Cash paid for income
    taxes

$
29,999


$
26,011     Net Income Per Common Share, Basic and
    Diluted.
 6




---



##### 



NII
    HOLDINGS, INC. AND SUBSIDIARIES
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        Three Months Ended March 31, 2007


Three Months Ended March 31, 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

$
84,164



161,870


$
0.52


$
64,998



152,166


$
0.43Effect of dilutive
    securities:Stock options






4,720











4,855Restricted stock






1,020











733Convertible notes, net of
    capitalized interest and taxes


2,967



18,258







3,629



25,122Diluted net income per
    share:Net income

$
87,131



185,868


$
0.47


$
68,627



182,876


$
0.38   Reclassifications.
  New Accounting Pronouncements. 06-3, 06-3. 06-3 states 06-3 06-3
   7




---



##### 



NII
    HOLDINGS, INC. AND SUBSIDIARIES
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        Note 2.
    Supplemental
    Balance Sheet Information  Prepaid
    Expenses and Other.
    March 31,


December 31,2007


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

$
29,444


$
14,813Advertising


13,755



70Commissions


12,395



16,164Insurance


8,001



5,767General prepaid expenses


7,070



4,337Local taxes


5,475



4,630Short-term advances to suppliers


4,355



4,793Rent


4,009



4,172Maintenance


3,971



3,112Insurance claims


3,891



3,193Other


13,820



10,325$
106,186


$
71,376    8




---



##### 



NII
    HOLDINGS, INC. AND SUBSIDIARIES
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     Other
    Assets.
    March 31,


December 31,2007


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

$
73,929


$
66,931Long-term advances to suppliers


34,845



14,516Deposits


23,734



20,983Deferred financing costs


16,093



17,304Income tax receivable


15,707



15,996Handsets under operating leases


6,513



5,970Other


1,883



1,631$
172,704


$
143,331     Accrued
    Expenses and Other.
    March 31,


December 31,2007


2006(in thousands)Capital expenditures

$
89,766


$
81,839Network system and information
    technology


50,950



46,741Payroll related items and
    commissions


48,936



55,654Customer deposits


33,703



31,044Non-income based taxes


30,212



30,430Accrued contingencies


23,396



24,369Income taxes


12,216



16,774License fees


10,339



10,765Deferred tax liability


8,232



7,756Marketing


7,081



5,551Inventory


5,349



2,236Professional fees


5,326



4,288Insurance


3,551



3,163Other


13,800



21,855$
342,857


$
342,465  9




---



##### 



NII
    HOLDINGS, INC. AND SUBSIDIARIES
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Deferred
    Credits.
    March 31,


December 31,2007


2006(in thousands)Deferred income tax liability

$
87,425


$
88,886Deferred credit from AOL Mexico
    acquisition


18,884



21,147$
106,309


$
110,033   Other
    Long-Term Liabilities.
    March 31,


December 31,2007


2006(in thousands)Accrued contingencies

$
52,408


$
61,516Asset retirement obligations


31,230



29,297Severance plan liability


6,634



6,468Other


9,204



4,240$
99,476


$
101,521   Note 3.
    Intangible
    Assets    March 31, 2007


December 31, 2006Gross





Net


Gross





NetCarrying


Accumulated


Carrying


Carrying


Accumulated


CarryingValue


Amortization


Value


Value


Amortization


Value(in thousands)Amortizable intangible
    assets:Licenses

$
398,193


$
(21,776
)

$
376,417


$
389,526


$
(20,330
)

$
369,196Customer base


41,693



(41,693
)






42,401



(42,401
)


Trade name and other


1,673



(1,673
)






1,664



(1,664
)


Total intangible
    assets

$
441,559


$
(65,142
)

$
376,417


$
433,591


$
(64,395
)

$
369,196  10




---



##### 



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

Expense2007

$
16,1892008


29,6252009


29,6252010


29,6252011


29,625       Note 4.
    Debt    March 31,


December 31,2007


2006(in thousands)2.875% convertible notes
    due 2034

$
300,000


$
300,0002.75% convertible notes
    due 2025


349,997



350,000Mexico syndicated loan
    facility


295,028



297,577Tower financing
    obligations


140,837



137,625Capital lease
    obligations


70,369



62,669Brazil spectrum license
    financing


10,558



9,770Other


40



40Total debt


1,166,829



1,157,681Less: current portion


(23,563
)


(23,294
)$
1,143,266


$
1,134,387   2.875% Convertible Notes.
  2.75% Convertible Notes.
 11




---



##### 



NII
    HOLDINGS, INC. AND SUBSIDIARIES
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Note 5.
    Commitments
    and Contingencies  Brazilian
    Contingencies.
      Argentine
    Contingencies.
  Turnover Tax.
         12




---



##### 



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


3,542Foreign currency translation
    adjustment


(715
)Unrecognized tax
    benefits  March 31, 2007

$
58,792    13




---



##### 



NII
    HOLDINGS, INC. AND SUBSIDIARIES
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     Deferred Tax Assets.
  Mexican Taxes.
  Note 7.
    Segment
    Reporting    14




---



##### 



Corporate


IntercompanyMexico


Brazil


Argentina


Peru


and other


Eliminations


Consolidated(in thousands)Three Months Ended
    March 31, 2007Service and other revenues

$
395,120


$
163,214


$
91,133


$
40,935


$
565


$
(284
)

$
690,683Digital handset and accessory
    revenues


5,060



8,134



6,912



2,818











22,924Operating revenues

$
400,180


$
171,348


$
98,045


$
43,753


$
565


$
(284
)

$
713,607Segment earnings (losses)

$
153,754


$
44,748


$
31,761


$
9,080


$
(30,856
)

$



$
208,487Management fee


(9,900
)














9,900







Depreciation and amortization


(33,171
)


(19,769
)


(7,242
)


(5,288
)


(1,636
)


98



(67,008
)Operating income (loss)


110,683



24,979



24,519



3,792



(22,592
)


98



141,479Interest expense, net


(14,212
)


(6,521
)


(494
)


(37
)


(5,463
)


2,398



(24,329
)Interest income


7,183



1,305



899



197



4,184



(2,398
)


11,370Foreign currency transaction
    (losses) gains, net


(4,650
)


575



476



44



23







(3,532
)Other income (expense), net


2,338



(765
)


247







7







1,827Income (loss) before income tax

$
101,342


$
19,573


$
25,647


$
3,996


$
(23,841
)

$
98


$
126,815Capital expenditures

$
92,983


$
52,289


$
9,929


$
10,797


$
1,524


$



$
167,522Three Months Ended
    March 31, 2006Service and other revenues

$
298,115


$
106,690


$
70,263


$
30,516


$
540


$
(168
)

$
505,956Digital handset and accessory
    revenues


6,991



8,565



4,907



1,852











22,315Operating revenues

$
305,106


$
115,255


$
75,170


$
32,368


$
540


$
(168
)

$
528,271Segment earnings (losses)

$
123,397


$
22,312


$
22,534


$
6,398


$
(21,057
)

$



$
153,584Depreciation and amortization


(20,694
)


(12,036
)


(5,578
)


(2,510
)


(754
)


98



(41,474
)Operating income (loss)


102,703



10,276



16,956



3,888



(21,811
)


98



112,110Interest expense, net


(9,059
)


(5,569
)


(515
)


(36
)


(6,259
)


23



(21,415
)Interest income


7,841



735



534



291



3,223



(23
)


12,601Foreign currency transaction
    (losses) gains, net


(1,351
)


(101
)


273



41



(3
)






(1,141
)Other (expense) income, net


(1,486
)


(991
)


229







(116
)






(2,364
)Income (loss) before income tax

$
98,648


$
4,350


$
17,477


$
4,184


$
(24,966
)

$
98


$
99,791Capital expenditures

$
73,795


$
41,680


$
7,894


$
4,611


$
875


$



$
128,855March 31, 2007Property, plant and equipment, net

$
737,038


$
466,773


$
153,442


$
89,485


$
46,537


$
(461
)

$
1,492,814Identifiable assets

$
1,975,522


$
716,481


$
349,778


$
176,385


$
176,202


$
(461
)

$
3,393,907December 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  15




---



##### 



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


17Business Overview


17Digital Handsets in Commercial
    Service


20Critical Accounting Policies and
    Estimates


20Ratio of Earnings to Fixed Charges


21Reclassifications


21Results of Operations


21a. Consolidated


22b. Nextel Mexico


26c. Nextel Brazil


29d. Nextel Argentina


31e. Nextel Peru


33f. Corporate and other


35Liquidity and Capital Resources


36Future Capital Needs and Resources


36Forward Looking Statements


38Effect of New Accounting Standards


39  16




---



##### 



Introduction    
    our consolidated financial condition and results of operations
    for the three-month periods ended March 31, 2007 and
    2006; and
    significant factors which we believe could affect our
    prospective financial condition and results of operation.  Form 10-K,
 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, and, except for our
    customers in Chile, with Sprint Nextel Corporation subscribers
    in the United States and 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 includes 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.   17




---



##### 



Focusing on Major Business Centers in Key Latin American
    Markets.
  Targeting High Value Business Customers.
  Providing Differentiated Services. push-to-talk one-to-many push-to-talk
    Delivering Superior Customer Service.
 18




---



##### 



Selectively Expanding our Service Areas. U.S.-Mexico
  Preserving the iDEN Opportunity. push-to-talk
  Planning for the Future.
   19




---



##### 



Digital
    Handsets in Commercial Service    Total Digital Handsets in Commercial ServiceMarch 31,


March 31,Country

2007


2006(in thousands)Mexico


1,691



1,209Brazil


981



694Argentina


685



530Peru


369



270Chile


3



Total


3,729



2,703  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.   20




---



##### 



Ratio of
    Earnings to Fixed Charges  Three Months Ended March 31,2007


20064.63x



4.10x     
    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       21




---



##### 



a.  Consolidated  % of





% ofConsolidated





Consolidated


Change fromMarch 31,


Operating


March 31,


Operating


Previous Year2007


Revenues


2006


Revenues


Dollars


Percent(dollars in thousands)Operating revenues
    Service and other revenues

$
690,683



97
%

$
505,956



96
%

$
184,727



37
%Digital handset and accessory
    revenues


22,924



3
%


22,315



4
%


609



3
%713,607



100
%


528,271



100
%


185,336



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


(188,895
)


(26
)%


(134,350
)


(26
)%


(54,545
)


41
%Cost of digital handset and
    accessory sales


(91,083
)


(13
)%


(69,801
)


(13
)%


(21,282
)


30
%(279,978
)


(39
)%


(204,151
)


(39
)%


(75,827
)


37
%Selling and marketing expenses


(88,422
)


(13
)%


(69,841
)


(13
)%


(18,581
)


27
%General and administrative expenses


(136,720
)


(19
)%


(100,695
)


(19
)%


(36,025
)


36
%Depreciation and amortization


(67,008
)


(9
)%


(41,474
)


(8
)%


(25,534
)


62
%Operating income


141,479



20
%


112,110



21
%


29,369



26
%Interest expense, net


(24,329
)


(3
)%


(21,415
)


(4
)%


(2,914
)


14
%Interest income


11,370



2
%


12,601



2
%


(1,231
)


(10
)%Foreign currency transaction
    losses, net


(3,532
)


(1
)%


(1,141
)






(2,391
)


210
%Other income (expense), net


1,827







(2,364
)






4,191



(177
)%Income before income tax provision


126,815



18
%


99,791



19
%


27,024



27
%Income tax provision


(42,651
)


(6
)%


(34,793
)


(7
)%


(7,858
)


23
%Net income

$
84,164



12
%

$
64,998



12
%

$
19,166



29
%    22




---



##### 



1.
    Operating
    revenues      2.
    Cost of
    revenues    
    a $31.9 million, or 49%, increase in consolidated
    interconnect costs resulting from a 47% increase in consolidated
    interconnect minutes of use;
    a $13.1 million, or 28%, increase 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 March 31, 2006 to
    March 31, 2007; and
    an $8.7 million, or 47%, increase in consolidated service
    and repair costs mainly resulting from an increase in
    subscribers participating under our handset maintenance programs.    3.
    Selling and
    marketing expenses    
    an $8.2 million, or 32%, increase in consolidated payroll
    expenses and direct commissions caused by a 32% increase in
    internal sales personnel to support growth into new markets in
    connection with the expansion of our networks to those markets
    and an increase in commissions incurred as a result of a 49%
    increase in total handset sales by internal sales personnel;
    a $7.7 million, or 27%, increase in consolidated indirect
    commissions resulting from a 40% increase in total handset sales
    through external sales channels, partially offset by a decrease
    in indirect commissions per handset sale; and
    a $2.0 million, or 16%, increase 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. 23




---



##### 



4.
    General and
    administrative expenses    
    a $12.1 million, or 24%, increase 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 markets;
    an $11.3 million, or 47%, increase in consolidated customer
    care expenses, mainly payroll and related expenses, resulting
    from additional customer care personnel necessary to support a
    larger customer base;
    a $3.8 million, or 74%, increase in stock option
    compensation expense, primarily resulting from grants of stock
    options in April 2006;
    a $2.7 million, or 36%, increase in consolidated bad debt
    expense, primarily as a result of the 35% increase in
    consolidated operating revenues;
    a $2.7 million, or 188%, increase in share-based payment
    expense for restricted stock, primarily resulting from grants of
    restricted stock in April 2006; and
    a $2.5 million, or 24%, increase 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    7.
    Income tax
    provision   24




---



##### 



Segment
    Results
    % ofConsolidated% of





% of


Selling,


Selling,Consolidated





Consolidated


General and


General and


SegmentThree Months Ended

Operating


Operating


Cost of


Cost of


Administrative


Administrative


EarningsMarch 31, 2007

Revenues


Revenues


Revenues


Revenues


Expenses


Expenses


(Losses)(dollars in thousands)Nextel Mexico

$
400,180



56
%

$
(139,522
)


50
%

$
(106,904
)


48
%

$
153,754Nextel Brazil


171,348



24
%


(72,074
)


26
%


(54,526
)


24
%


44,748Nextel Argentina


98,045



14
%


(45,406
)


16
%


(20,878
)


9
%


31,761Nextel Peru


43,753



6
%


(22,558
)


8
%


(12,115
)


5
%


9,080Corporate and other


565







(702
)






(30,719
)


14
%


(30,856
)Intercompany eliminations


(284
)






284















Total consolidated

$
713,607



100
%

$
(279,978
)


100
%

$
(225,142
)


100
%   % ofConsolidated% of





% of


Selling,


Selling,Consolidated





Consolidated


General and


General and


SegmentThree Months Ended

Operating


Operating


Cost of


Cost of


Administrative


Administrative


EarningsMarch 31, 2006

Revenues


Revenues


Revenues


Revenues


Expenses


Expenses


(Losses)(dollars in thousands)Nextel Mexico

$
305,106



58
%

$
(100,461
)


49
%

$
(81,248
)


48
%

$
123,397Nextel Brazil


115,255



22
%


(53,332
)


26
%


(39,611
)


23
%


22,312Nextel Argentina


75,170



14
%


(33,778
)


17
%


(18,858
)


11
%


22,534Nextel Peru


32,368



6
%


(16,422
)


8
%


(9,548
)


6
%


6,398Corporate and other


540







(326
)






(21,271
)


12
%


(21,057
)Intercompany eliminations


(168
)






168















Total consolidated

$
528,271



100
%

$
(204,151
)


100
%

$
(170,536
)


100
%  25




---



##### 



b.  Nextel
    Mexico  % of





% ofNextel





NextelMexicos





Mexicos


Change fromMarch 31,


Operating


March 31,


Operating


Previous Year2007


Revenues


2006


Revenues


Dollars


Percent(dollars in thousands)Operating revenuesService and other revenues

$
395,120



99
%

$
298,115



98
%

$
97,005



33
%Digital handset and accessory
    revenues


5,060



1
%


6,991



2
%


(1,931
)


(28
)%400,180



100
%


305,106



100
%


95,074



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


(82,598
)


(21
)%


(62,217
)


(20
)%


(20,381
)


33
%Cost of digital handset and
    accessory sales


(56,924
)


(14
)%


(38,244
)


(13
)%


(18,680
)


49
%(139,522
)


(35
)%


(100,461
)


(33
)%


(39,061
)


39
%Selling and marketing expenses


(54,245
)


(14
)%


(43,902
)


(14
)%


(10,343
)


24
%General and administrative expenses


(52,659
)


(13
)%


(37,346
)


(12
)%


(15,313
)


41
%Segment earnings


153,754



38
%


123,397



41
%


30,357



25
%Management fee


(9,900
)


(2
)%










(9,900
)


NMDepreciation and amortization


(33,171
)


(8
)%


(20,694
)


(7
)%


(12,477
)


60
%Operating income


110,683



28
%


102,703



34
%


7,980



8
%Interest expense, net


(14,212
)


(4
)%


(9,059
)


(3
)%


(5,153
)


57
%Interest income


7,183



2
%


7,841



3
%


(658
)


(8
)%Foreign currency transaction
    losses, net


(4,650
)


(1
)%


(1,351
)


(1
)%


(3,299
)


244
%Other income (expense), net


2,338







(1,486
)


(1
)%


3,824



(257
)%Income before income tax

$
101,342



25
%

$
98,648



32
%

$
2,694



3
%     NM-Not Meaningful
  period-over-period
   26




---



##### 



1.
    Operating
    revenues      2.
    Cost of
    revenues    
    a $12.0 million, or 42%, increase in interconnect costs
    generally resulting from a 43% increase in interconnect minutes
    of use;
    a $4.5 million, or 20%, increase in direct switch and
    transmitter and receiver site costs resulting from a 31%
    increase in the number of transmitter and receiver sites in
    service from March 31, 2006 to March 31, 2007; and
    a $3.3 million, or 39%, increase in service and repair
    costs largely due to increased activity under Nextel
    Mexicos handset maintenance program.    3.
    Selling and
    marketing expenses    
    a $4.7 million, or 23%, increase in indirect commissions
    primarily due to a 44% increase in handset sales by Nextel
    Mexicos external sales channels, partially offset by a
    decrease in indirect commission per handset sale;
    a $3.7 million, or 29%, increase in direct commissions and
    payroll expenses resulting from a 75% increase in handset sales
    by Nextel Mexicos sales personnel and a 29% increase in
    internal sales personnel, partially offset by a decrease in
    direct commission per handset sale; and
    a $1.5 million, or 17%, increase 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. 27




---



##### 



4.
    General and
    administrative expenses    
    a $7.1 million, or 59%, 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;
    a $5.9 million, or 37%, increase 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
    a $1.6 million, or 37%, increase in bad debt expense, which
    increased slightly as a percentage of revenues from 1.39% in the
    first quarter of 2006 to 1.45% in the first quarter of 2007.  5.
    Management
    fee    6.
    Depreciation
    and amortization    7.
    Interest
    expense, net    8.
    Foreign
    currency transaction losses, net    9.
    Other income
    (expense), net     28




---



##### 



c.  Nextel
    Brazil  % of





% ofNextel





NextelBrazils





Brazils


Change fromMarch 31,


Operating


March 31,


Operating


Previous Year2007


Revenues


2006


Revenues


Dollars


Percent(dollars in thousands)Operating revenuesService and other revenues

$
163,214



95
%

$
106,690



93
%

$
56,524



53
%Digital handset and accessory
    revenues


8,134



5
%


8,565



7
%


(431
)


(5
)%171,348



100
%


115,255



100
%


56,093



49
%Cost of revenuesCost of service (exclusive of
    depreciation and amortization included below)


(55,997
)


(33
)%


(36,588
)


(32
)%


(19,409
)


53
%Cost of digital handset and
    accessory sales


(16,077
)


(9
)%


(16,744
)


(15
)%


667



(4
)%(72,074
)


(42
)%


(53,332
)


(47
)%


(18,742
)


35
%Selling and marketing expenses


(20,597
)


(12
)%


(15,169
)


(13
)%


(5,428
)


36
%General and administrative expenses


(33,929
)


(20
)%


(24,442
)


(21
)%


(9,487
)


39
%Segment earnings


44,748



26
%


22,312



19
%


22,436



101
%Depreciation and amortization


(19,769
)


(11
)%


(12,036
)


(10
)%


(7,733
)


64
%Operating income


24,979



15
%


10,276



9
%


14,703



143
%Interest expense, net


(6,521
)


(4
)%


(5,569
)


(5
)%


(952
)


17
%Interest income


1,305



1
%


735



1
%


570



78
%Foreign currency transaction gains
    (losses), net


575







(101
)






676



NMOther expense, net


(765
)


(1
)%


(991
)


(1
)%


226



(23
)%Income before income tax

$
19,573



11
%

$
4,350



4
%

$
15,223



NM     NM-Not Meaningful
     29




---



##### 



1.
    Operating
    revenues    
    a 41% increase in the average number of digital handsets in
    service resulting from growth in Nextel Brazils existing
    markets, as well as the expansion of service coverage into new
    markets in connection with our balanced growth and expansion
    objectives;
    an increase in local currency-based average revenue per
    subscriber; and
    a $5.0 million, or 75%, increase in revenues generated from
    Nextel Brazils handset maintenance program due to growth
    in the number of subscribers that are utilizing this program.  2.
    Cost of
    revenues    
    an $11.6 million, or 69%, increase in interconnect costs
    resulting from a 49% increase in interconnect minutes of use;
    a $6.0 million, or 42%, increase in direct switch and
    transmitter and receiver site costs, including spectrum license
    fees, resulting from a 23% increase in the number of transmitter
    and receiver sites in service from March 31, 2006 to
    March 31, 2007; and
    a $1.5 million, or 42%, increase in service and repair
    costs largely due to the growth in the number of subscribers who
    participate in Nextel Brazils handset maintenance program.  3.
    Selling and
    marketing expenses    
    a $2.9 million, or 39%, increase in payroll expenses and
    direct commissions largely as a result of a 37% increase in
    selling and marketing personnel necessary to support continued
    sales growth and a 42% increase in handset sales by Nextel
    Brazils internal sales force, partially offset by a
    decrease in direct commissions earned per handset sale; and
    a $1.9 million, or 52%, increase in indirect commissions
    resulting from a 37% increase in handset sales through Nextel
    Brazils external sales channels, as well as an increase in
    indirect commissions earned per handset sale resulting from
    premiums paid on sales exceeding pre-established thresholds.  4.
    General and
    administrative expenses    
    a $3.1 million, or 48%, increase 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 49% increase in Nextel Brazils operating revenues;
    a $2.7 million, or 38%, increase in customer care expenses
    resulting from an increase in customer care personnel necessary
    to support a larger customer base, as well as an increase in
    facilities expenses;
    a $2.5 million, or 41%, increase in general corporate costs
    resulting from an increase in general and administrative
    personnel; and
    a $1.1 million, or 51%, increase in information technology
    expenses related to the expansion of Nextel Brazils
    network and its growing subscriber base. 30




---



##### 



5.
    Depreciation
    and amortization   d.  Nextel
    Argentina  % of





% ofNextel





NextelArgentinas





Argentinas


Change fromMarch 31,


Operating


March 31,


Operating


Previous Year2007


Revenues


2006


Revenues


Dollars


Percent(dollars in thousands)Operating revenuesService and other revenues

$
91,133



93
%

$
70,263



93
%

$
20,870



30
%Digital handset and accessory
    revenues


6,912



7
%


4,907



7
%


2,005



41
%98,045



100
%


75,170



100
%


22,875



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


(34,200
)


(35
)%


(24,828
)


(33
)%


(9,372
)


38
%Cost of digital handset and
    accessory sales


(11,206
)


(11
)%


(8,950
)


(12
)%


(2,256
)


25
%(45,406
)


(46
)%


(33,778
)


(45
)%


(11,628
)


34
%Selling and marketing expenses


(7,089
)


(8
)%


(5,939
)


(8
)%


(1,150
)


19
%General and administrative expenses


(13,789
)


(14
)%


(12,919
)


(17
)%


(870
)


7
%Segment earnings


31,761



32
%


22,534



30
%


9,227



41
%Depreciation and amortization


(7,242
)


(7
)%


(5,578
)


(7
)%


(1,664
)


30
%Operating income


24,519



25
%


16,956



23
%


7,563



45
%Interest expense, net


(494
)






(515
)


(1
)%


21



(4
)%Interest income


899



1
%


534



1
%


365



68
%Foreign currency transaction
    gains, net


476







273







203



74
%Other income, net


247







229







18



8
%Income before income tax

$
25,647



26
%

$
17,477



23
%

$
8,170



47
%     1.
    Operating
    revenues    
    a 30% increase in the average number of digital handsets in
    service, resulting primarily from growth in Nextel
    Argentinas existing markets; and
    a $2.4 million, or 34%, increase in revenues generated from
    Nextel Argentinas handset maintenance program due to
    growth in the number of Nextel Argentinas subscribers that
    are utilizing this program. 31




---



##### 



2.
    Cost of
    revenues    
    a $4.4 million, or 33%, increase in interconnect costs
    largely as a result of a 20% increase in interconnect minutes of
    use, as well as an increase in minutes of use for calls between
    our subscribers and other carriers mobile subscribers
    which generally require the payment of higher per minute
    interconnection costs;
    a $3.5 million, or 67%, increase in service and repair
    costs largely due to increased subscribers under Nextel
    Argentinas handset maintenance program; and
    a $1.6 million, or 26%, increase in direct switch and
    transmitter and receiver site costs, including spectrum license
    fees, primarily due to a 14% increase in the number of
    transmitter and receiver sites in service from March 31,
    2006 to March 31, 2007, as well as an increase in rental
    costs and municipal taxes per site.    3.
    Selling and
    marketing expenses    
    a $0.7 million, or 27%, increase in indirect commissions
    primarily due to a 38% increase in handset sales obtained
    through Nextel Argentinas external sales channels,
    partially offset by a decrease in expenses related to various
    external sales events; and
    a $0.4 million, or 19%, increase in payroll expenses and
    direct commissions largely due to a 17% increase in selling and
    marketing personnel necessary to support continued sales growth
    and an increase in direct commissions resulting from an 18%
    increase in handset sales by Nextel Argentinas sales force.  4.
    Depreciation
    and amortization   32




---



##### 



e.  Nextel
    Peru  % of





% ofNextel





NextelPerus





Perus


Change fromMarch 31,


Operating


March 31,


Operating


Previous Year2007


Revenues


2006


Revenues


Dollars


Percent(dollars in thousands)Operating revenuesService and other revenues

$
40,935



94
%

$
30,516



94
%

$
10,419



34
%Digital handset and accessory
    revenues


2,818



6
%


1,852



6
%


966



52
%43,753



100
%


32,368



100
%


11,385



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


(15,890
)


(37
)%


(10,559
)


(33
)%


(5,331
)


50
%Cost of digital handset and
    accessory sales


(6,668
)


(15
)%


(5,863
)


(18
)%


(805
)


14
%(22,558
)


(52
)%


(16,422
)


(51
)%


(6,136
)


37
%Selling and marketing expenses


(4,150
)


(9
)%


(3,523
)


(11
)%


(627
)


18
%General and administrative expenses


(7,965
)


(18
)%


(6,025
)


(18
)%


(1,940
)


32
%Segment earnings


9,080



21
%


6,398



20
%


2,682



42
%Depreciation and amortization


(5,288
)


(12
)%


(2,510
)


(8
)%


(2,778
)


111
%Operating income


3,792



9
%


3,888



12
%


(96
)


(2
)%Interest expense, net


(37
)






(36
)






(1
)


3
%Interest income


197







291



1
%


(94
)


(32
)%Foreign currency transaction
    gains, net


44







41







3



7
%Income before income tax

$
3,996



9
%

$
4,184



13
%

$
(188
)


(4
)%     1.
    Operating
    revenues    2.
    Cost of
    revenues    
    a $3.9 million, or 62%, increase in interconnect costs due
    to a 44% increase in interconnect minutes of use, including an
    increase in
    mobile-to-mobile
    minutes of use, which resulted in higher interconnect costs per
    minute;
    a $0.8 million, or 30%, increase in direct switch and
    transmitter and receiver site costs due to a 13% increase in the
    number of transmitter and receiver sites in service from
    March 31, 2006 to March 31, 2007; and
    a $0.5 million, or 43%, increase in service and repair
    costs largely due to increased subscribers under Nextel
    Perus handset maintenance program. 33




---



##### 



3.
    General and
    administrative expenses    
    a $0.6 million, or 27%, increase in general corporate costs
    due to an increase in general and administrative personnel
    necessary to support a larger customer base;
    a $0.6 million, or 348%, increase in bad debt expense,
    which increased as a percentage of revenues from 0.55% in the
    first quarter of 2006 to 1.82% in the first quarter of 2007,
    resulting from the introduction of certain rate plans that are
    available to customers with slightly higher credit risk; and
    a $0.4 million, or 19%, increase in customer care expenses,
    mainly caused by an increase in customer care and billing
    operations personnel needed to support a growing customer base.  4.
    Depreciation
    and amortization   34




---



##### 



f.  Corporate
    and other  % of





% ofCorporate





Corporateand other





and other


Change fromMarch 31,


Operating


March 31,


Operating


Previous Year2007


Revenues


2006


Revenue


Dollars


Percent(dollars in thousands)Operating revenuesService and other revenues

$
565



100
%

$
540



100
%

$
25



5
%Digital handset and accessory
    revenues






















565



100
%


540



100
%


25



5
%Cost of revenuesCost of service (exclusive of
    depreciation and amortization included below)


(494
)


(87
)%


(326
)


(60
)%


(168
)


52
%Cost of digital handset and
    accessory sales


(208
)


(37
)%










(208
)


NM(702
)


(124
)%


(326
)


(60
)%


(376
)


115
%Selling and marketing expenses


(2,341
)


NM



(1,308
)


(242
)%


(1,033
)


79
%General and administrative expenses


(28,378
)


NM



(19,963
)


NM



(8,415
)


42
%Segment losses


(30,856
)


NM



(21,057
)


NM



(9,799
)


47
%Management fee


9,900



NM











9,900



NMDepreciation and amortization


(1,636
)


(290
)%


(754
)


(140
)%


(882
)


117
%Operating loss


(22,592
)


NM



(21,811
)


NM



(781
)


4
%Interest expense, net


(5,463
)


NM



(6,259
)


NM



796



(13
)%Interest income


4,184



NM



3,223



NM



961



30
%Foreign currency transaction gains
    (losses), net


23



4
%


(3
)


(1
)%


26



NMOther income (expense), net


7



1
%


(116
)


(21
)%


123



(106
)%Loss before income tax

$
(23,841
)


NM


$
(24,966
)


NM


$
1,125



(5
)%    NM-Not Meaningful
    1.
    General and
    administrative expenses    2.
    Management
    fee   35




---



##### 



Liquidity
    and Capital Resources      Cash
    Flows
       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. 36




---



##### 



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.  Form 10-K.
  Capital Expenditures.
  
    the expansion of the coverage of our digital mobile networks to
    new market areas, primarily in Mexico and Brazil;
    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 the
    3.4 GHz spectrum and local concession that we acquired
    through the purchase of Cosmofrecuencias in Mexico;
    potential funding of future technology initiatives; and
    non-network
    related information technology projects.    Future Outlook.
 37




---



##### 




    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;
    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; 38




---



##### 




    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, 06-3. 06-3 states 06-3 06-3
   39




---



##### 



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 40




---



##### 




    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


March 31, 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$)

$
1,270


$
1,768


$
1,859


$
1,872


$
1,926


$
669,192


$
677,887


$
1,460,230


$
678,202


$
1,258,202Average Interest Rate


10.0
%


10.0
%


10.0
%


10.0
%


10.0
%


3.0
%


3.1
%






3.1
%Fixed Rate (MP)

$
13,944


$
39,522


$
40,232


$
5,407


$
6,414


$
89,244


$
194,763


$
194,763


$
189,867


$
189,867Average Interest Rate


12.7
%


11.9
%


12.0
%


16.9
%


16.9
%


16.6
%


14.5
%






14.4
%Fixed Rate (BR)

$
995


$
3,048


$
3,424


$
3,917


$
4,562


$
65,249


$
81,195


$
81,195


$
75,589


$
75,589Average Interest Rate


26.5
%


18.1
%


19.1
%


20.0
%


20.9
%


25.6
%


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)

$
7,354


$
24,515


$
24,515


$



$



$



$
56,384


$
56,384


$
57,423


$
57,423Average Interest Rate


8.6
%


8.6
%


8.6
%














8.6
%






8.5
%Interest Rate
    Swap:Variable to Fixed

$
3,731


$
12,435


$
12,435


$



$



$



$
28,601


$
(1,090
)

$
29,128


$
(1,406
)Average Pay Rate


10.8
%


10.8
%


10.8
%














10.8
%






10.8
%Average Receive Rate


8.6
%


8.6
%


8.6
%














8.6
%






8.5
%   Item 4.
    Controls
    and Procedures.  Evaluation
    of Disclosure Controls and Procedures
      Changes
    in Internal Control over Financial Reporting
   41




---



##### 



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

Exhibit Description10
.1*

Employment Letter Agreement dated
    January 30, 2007 between NII Holdings, Inc. and Jose Felipe.10
.2*

Employment Letter Agreement dated
    February 21, 2007 between NII Holdings, Inc. and Peter A.
    Foyo.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.     *
    
    Indicates Management Compensatory Plan or Agreement. 42




---



##### 



SIGNATURE
    By:
    /s/  DANIEL
    E. FREIMAN           43




---



##### 



EXHIBIT INDEX
   ExhibitNumber

Exhibit Description10
.1*

Employment Letter Agreement dated
    January 30, 2007 between NII Holdings, Inc. and Jose Felipe.10
.2*

Employment Letter Agreement dated
    February 21, 2007 between NII Holdings, Inc. and Peter A.
    Foyo.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.     *
    
    Indicates Management Compensatory Plan or Agreement. 44