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

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

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

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

(I.R.S. Employer
    Identification No.)1875 Explorer Street, Suite 1000
    Reston, Virginia

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

on August 1, 2008Common Stock, $0.001 par value per share

165,694,742




---



##### 





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


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


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


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


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


5Notes to Condensed Consolidated Financial Statements


6Item 2.


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


19Item 3.


Quantitative and Qualitative Disclosures About Market Risk


49Item 4.


Controls and Procedures


51Part II. Other Information.Item 1.


Legal Proceedings


52Item 1A.


Risk Factors


52Item 2.


Unregistered Sales of Equity Securities and Use of Proceeds


52Item 4.


Submission of Matters to a Vote of Security Holders


53Item 6.


Exhibits


53  1




---



##### 



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


December 31,2008


2007ASSETSCurrent assetsCash and cash equivalents

$
1,279,780


$
1,370,165Short-term investments


165,539



241,764Accounts receivable, less allowance for doubtful accounts of
    $30,644 and $20,204


544,928



438,348Handset and accessory inventory


177,283



107,314Deferred income taxes, net


150,613



121,512Prepaid expenses and other


131,872



110,736Total current assets


2,450,015



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


2,239,116



1,853,082Intangible assets, net


421,521



410,447Deferred income taxes, net


601,947



541,406Other assets


301,700



241,962Total assets

$
6,014,299


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

$
141,241


$
125,040Accrued expenses and other


501,890



436,703Deferred revenues


130,734



109,640Accrued interest


12,643



12,439Current portion of long-term debt


76,171



70,448Total current liabilities


862,679



754,270Long-term debt


2,341,271



2,196,069Deferred revenues


31,302



32,892Deferred credits


148,579



158,621Other long-term liabilities


157,730



126,511Total liabilities


3,541,561



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






Common stock, par value $0.001, 600,000 shares
    authorized  2008 and 2007, 165,575 shares issued
    and outstanding  2008, 169,910 shares issued and
    outstanding  2007


166



170Paid-in capital


924,188



1,091,672Retained earnings


1,272,642



1,003,799Accumulated other comprehensive income


275,742



72,732Total stockholders equity


2,472,738



2,168,373Total liabilities and stockholders equity

$
6,014,299


$
5,436,736    2




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##### 



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


Three Months EndedJune 30,


June 30,2008


2007


2008


2007Operating revenuesService and other revenues

$
1,990,803


$
1,451,840


$
1,043,039


$
759,999Digital handset and accessory revenues


106,368



49,909



60,915



26,9852,097,171



1,501,749



1,103,954



786,984Operating expensesCost of service (exclusive of depreciation and amortization
    included below)


542,992



387,103



284,065



204,019Cost of digital handsets and accessories


293,398



207,649



159,127



110,755Selling, general and administrative


669,957



489,448



355,888



264,306Depreciation


182,778



136,325



96,564



70,961Amortization


16,527



3,371



8,589



1,7271,705,652



1,223,896



904,233



651,768Operating income


391,519



277,853



199,721



135,216Other income (expense)Interest expense, net


(81,626
)


(53,982
)


(40,238
)


(29,653
)Interest income


36,528



22,682



17,588



12,470Foreign currency transaction gains, net


40,306



5,799



37,401



9,331Other (expense) income, net


(5,175
)


633



(646
)


(1,194
)(9,967
)


(24,868
)


14,105



(9,046
)Income before income tax provision


381,552



252,985



213,826



126,170Income tax provision


(112,709
)


(84,741
)


(58,552
)


(42,090
)Net income

$
268,843


$
168,244


$
155,274


$
84,080Net income, per common share, basic

$
1.60


$
1.04


$
0.93


$
0.52Net income, per common share, diluted

$
1.52


$
0.94


$
0.88


$
0.47Weighted average number of common shares outstanding,
    basic


168,129



162,371



166,907



162,867Weighted average number of common shares outstanding,
    diluted


187,025



185,883



185,899



185,845Comprehensive income, net of income taxesForeign currency translation adjustment

$
202,568


$
42,090


$
240,601


$
47,005Reclassification for gains on derivatives included in other
    (expense) income, net


146



395



64



42Unrealized gains on derivatives, net


297



361



289



123Other comprehensive income


203,011



42,846



240,954



47,170Net income


268,843



168,244



155,274



84,080Total comprehensive income

$
471,854


$
211,090


$
396,228


$
131,250    3




---



##### 



NII
    HOLDINGS, INC. AND SUBSIDIARIES
  CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN
    STOCKHOLDERS EQUITY
 For the Six Months Ended June 30, 2008
 (in thousands)
 Unaudited
  AccumulatedOther


TotalCommon Stock


Paid-in


Retained


Comprehensive


StockholdersShares


Amount


Capital


Earnings


Income


EquityBalance, January 1, 2008


169,910


$
170


$
1,091,672


$
1,003,799


$
72,732


$
2,168,373Net income














268,843







268,843Other comprehensive income


















203,010



203,010Purchase of common stock


(5,555
)


(5
)


(242,665
)










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










35,226











35,226Exercise of stock options


1,220



1



28,639











28,640Tax benefit on exercise of stock options










2,877











2,877Tax benefit on prior periods stock option exercises










8,439











8,439Balance, June 30, 2008


165,575


$
166


$
924,188


$
1,272,642


$
275,742


$
2,472,738    4




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##### 



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


2007Cash flows from operating activities:Net income

$
268,843


$
168,244Adjustments to reconcile net income to net cash provided by
    operating activities:Amortization of debt financing costs


4,463



2,603Depreciation and amortization


199,305



139,696Provision for losses on accounts receivable


39,211



21,804Foreign currency transaction gains, net


(40,306
)


(5,799
)Deferred income tax (benefit) provision


(27,018
)


25,662Utilization of deferred credit






(3,729
)Share-based payment expense


35,392



29,448Excess tax benefit from share-based payment


(7,953
)


(2,505
)Accretion of asset retirement obligations


3,643



2,868Loss on short-term investments


2,955



Other, net


2,020



735Change in assets and liabilities:Accounts receivable, gross


(112,927
)


(74,083
)Handset and accessory inventory


(64,673
)


(42,977
)Prepaid expenses and other


(15,388
)


(45,852
)Other long-term assets


(45,577
)


(34,708
)Accounts payable, accrued expenses and other


55,419



34,846Current deferred revenue


13,830



9,720Other long-term liabilities


4,766



1,909Net cash provided by operating activities


316,005



227,882Cash flows from investing activities:Capital expenditures


(423,773
)


(361,135
)Payments for acquisitions, purchases of licenses and other


(4,275
)


(15,365
)Proceeds from sales of short-term investments


355,013



Purchase of short-term investments


(273,888
)


Other


(45
)


(845
)Net cash used in investing activities


(346,968
)


(377,345
)Cash flows from financing activities:Payments to purchase common stock


(242,665
)


(329,980
)Proceeds from issuance of convertible notes






1,200,000Borrowings under syndicated loan facilities


125,000



Repayments under syndicated loan facilities


(31,922
)


(9,152
)Proceeds from stock option exercises


28,639



77,974Payment of debt financing costs






(22,532
)Excess tax benefit from share-based payment


7,953



2,505Proceeds from tower financing transactions


27,271



7,453Repayments under capital leases, license financing, tower
    financing and other transactions


(5,710
)


(2,578
)Net cash (used in) provided by financing activities


(91,434
)


923,690Effect of exchange rate changes on cash and cash
    equivalents


32,012



(575
)Net (decrease) increase in cash and cash equivalents


(90,385
)


773,652Cash and cash equivalents, beginning of period


1,370,165



708,591Cash and cash equivalents, end of period

$
1,279,780


$
1,482,243    5




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##### 



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.
  June 30,


December 31,2008


2007(in thousands)Cumulative foreign currency translation adjustment

$
277,200


$
74,633Unrealized losses on derivatives


(1,458
)


(1,901
)$
275,742


$
72,732   Supplemental
    Cash Flow Information.
  Six Months EndedJune 30,2008


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

$
423,773


$
361,135Change in capital expenditures accrued and unpaid or financed,
    including accreted interest capitalized


11,509



(19,746
)$
435,282


$
341,389Interest costsInterest expense, net

$
81,626


$
53,982Interest capitalized


4,169



3,186$
85,795


$
57,168Cash paid for interest, net of amounts capitalized

$
54,613


$
36,766Cash paid for income taxes

$
127,009


$
70,608   non-cash
  Net Income Per Common Share, Basic and
    Diluted.
 6




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##### 



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


Six Months Ended June 30, 2007Income


Shares


Per Share


Income


Shares


Per Share(Numerator)


(Denominator)


Amount


(Numerator)


(Denominator)


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

$
268,843



168,129


$
1.60


$
168,244



162,371


$
1.04Effect of dilutive securities:Stock options






1,524











4,480Restricted stock






240











774Convertible notes, net of capitalized interest and taxes


15,807



17,132







5,797



18,258Diluted net income per share:Net income

$
284,650



187,025


$
1.52


$
174,041



185,883


$
0.94   Three Months Ended June 30, 2008


Three Months Ended June 30, 2007Income


Shares


Per Share


Income


Shares


Per Share(Numerator)


(Denominator)


Amount


(Numerator)


(Denominator)


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

$
155,274



166,907


$
0.93


$
84,080



162,867


$
0.52Effect of dilutive securities:Stock options






1,584











4,193Restricted stock






276











527Convertible notes, net of capitalized interest and taxes


7,871



17,132







2,859



18,258Diluted net income per share:Net income

$
163,145



185,899


$
0.88


$
86,939



185,845


$
0.47   Purchase of Common Stock.
 7




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##### 



NII
    HOLDINGS, INC. AND SUBSIDIARIES
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Reclassifications.
  New Accounting Pronouncements. No. 157-1, FSP No. 157-1, No. 157-2, No. 157-2, No. 157-2,
     8




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##### 



NII
    HOLDINGS, INC. AND SUBSIDIARIES
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      No. FAS 142-3, FAS 142-3. FAS 142-3 FAS 142-3 FAS 142-3 FAS 142-3
  14-1, 14-1. 14-1 14-1 FSP APB 14-1 14-1
 9




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##### 



NII
    HOLDINGS, INC. AND SUBSIDIARIES
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Note 2.
    Fair
    Value Measurements    Level 1:
  Level 2:
  Level 3:
    Fair Value Measurements as of June 30, 2008


Fair Value as ofUsing the Fair Value Hierarchy


June 30,Short-Term Investments

Level 1


Level 2


Level 3


2008Available for sale securities  Nextel Brazil
    investments

$
41,334


$



$



$
41,334Available for sale securities  Enhanced cash fund






124,205







124,205$
41,334


$
124,205


$



$
165,539        10




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##### 



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


December 31, 2007Gross





Net


Gross





NetCarrying


Accumulated


Carrying


Carrying


Accumulated


CarryingValue


Amortization


Value


Value


Amortization


Value(In thousands)Amortizable intangible assets:Licenses

$
476,679


$
(55,158
)

$
421,521


$
446,222


$
(35,775
)

$
410,447Customer base


45,049



(45,049
)






42,617



(42,617
)


Trade name and other


1,939



(1,939
)






1,796



(1,796
)


Total intangible assets

$
523,667


$
(102,146
)

$
421,521


$
490,635


$
(80,188
)

$
410,447     EstimatedAmortizationYears

Expense2008

$
32,1632009


31,9532010


31,9532011


31,9532012


31,953    11




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##### 



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


December 31,2008


2007(in thousands)3.125% convertible notes due 2012

$
1,200,000


$
1,200,0002.75% convertible notes due 2025


349,996



349,996Brazil syndicated loan facility


300,000



175,000Mexico syndicated loan facility


253,877



279,355Tower financing obligations


218,847



177,199Capital lease obligations


85,882



75,436Brazil spectrum license financing


8,759



9,446Other


81



85Total debt


2,417,442



2,266,517Less: current portion


(76,171
)


(70,448
)$
2,341,271


$
2,196,069   3.125% Convertible Notes.
  2.75% Convertible Notes.
  Brazil Syndicated Loan Facility.
    Tower Financing Obligations.
 12




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##### 



NII
    HOLDINGS, INC. AND SUBSIDIARIES
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Note 5.
    Commitments
    and Contingencies  Brazilian
    Contingencies.
      Argentine
    Contingencies.
    Turnover Tax.
         13




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##### 



NII
    HOLDINGS, INC. AND SUBSIDIARIES
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Universal Service Tax.
      Legal
    Proceedings.
    Note 6.
    Income
    Taxes  non-U.S. jurisdictions
 14




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##### 



NII
    HOLDINGS, INC. AND SUBSIDIARIES
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Unrecognized tax benefits  December 31, 2007

$
67,955Additions for current year tax positions


5,325Foreign currency translation adjustment


2,709Unrecognized tax benefits  June 30, 2008

$
75,989         10-year more-likely-than-not
   15




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##### 



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


IntercompanyMexico


Brazil


Argentina


Peru


and other


Eliminations


Consolidated(in thousands)Six Months Ended June 30, 2008Service and other revenues

$
1,024,101


$
616,584


$
241,121


$
105,639


$
4,004


$
(646
)

$
1,990,803Digital handset and accessory revenues


39,231



34,887



23,395



8,855











106,368Operating revenues

$
1,063,332


$
651,471


$
264,516


$
114,494


$
4,004


$
(646
)

$
2,097,171Segment earnings (losses)

$
391,480


$
175,248


$
81,817


$
22,630


$
(80,351
)

$



$
590,824Management fee


(16,752
)














16,800



(48
)


Depreciation and amortization


(96,156
)


(68,993
)


(18,355
)


(9,889
)


(5,792
)


(120
)


(199,305
)Operating income (loss)


278,572



106,255



63,462



12,741



(69,343
)


(168
)


391,519Interest expense


(31,732
)


(26,075
)


(1,387
)


(36
)


(26,585
)


4,189



(81,626
)Interest income


21,852



3,260



1,867



618



13,120



(4,189
)


36,528Foreign currency transaction gains (losses), net


16,515



25,467



(2,673
)


(162
)


1,111



48



40,306Other (expense) income, net


(159
)


(1,552
)


44







(3,508
)






(5,175
)Income (loss) before income tax

$
285,048


$
107,355


$
61,313


$
13,161


$
(85,205
)

$
(120
)

$
381,552Capital expenditures

$
126,709


$
219,310


$
40,261


$
22,556


$
26,446


$



$
435,282 16




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##### 



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


IntercompanyMexico


Brazil


Argentina


Peru


and other


Eliminations


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

$
822,317


$
357,101


$
188,101


$
83,490


$
1,382


$
(551
)

$
1,451,840Digital handset and accessory revenues


10,648



17,726



15,654



5,881











49,909Operating revenues

$
832,965


$
374,827


$
203,755


$
89,371


$
1,382


$
(551
)

$
1,501,749Segment earnings (losses)

$
310,940


$
94,088


$
63,827


$
17,873


$
(69,179
)

$



$
417,549Management fee


(19,800
)














19,800







Depreciation and amortization


(68,214
)


(42,657
)


(14,868
)


(10,884
)


(3,270
)


197



(139,696
)Operating income (loss)


222,926



51,431



48,959



6,989



(52,649
)


197



277,853Interest expense


(29,312
)


(14,342
)


(1,124
)


(67
)


(14,335
)


5,198



(53,982
)Interest income


12,909



314



2,037



341



12,279



(5,198
)


22,682Foreign currency transaction gains (losses), net


1,208



4,239



306



54



(8
)






5,799Other income (expense), net


2,260



(1,554
)


1,577



1



(1,651
)






633Income (loss) before income tax

$
209,991


$
40,088


$
51,755


$
7,318


$
(56,364
)

$
197


$
252,985Capital expenditures

$
156,758


$
127,019


$
25,767


$
23,657


$
8,188


$



$
341,389Three Months Ended June 30, 2008Service and other revenues

$
530,786


$
330,268


$
126,154


$
53,943


$
2,208


$
(320
)

$
1,043,039Digital handset and accessory revenues


24,174



19,718



12,330



4,693











60,915Operating revenues

$
554,960


$
349,986


$
138,484


$
58,636


$
2,208


$
(320
)

$
1,103,954Segment earnings (losses)

$
199,728


$
93,858


$
42,439


$
10,569


$
(41,720
)

$



$
304,874Management fee


(8,354
)














8,402



(48
)


Depreciation and amortization


(50,057
)


(37,044
)


(9,687
)


(4,963
)


(3,184
)


(218
)


(105,153
)Operating income (loss)


141,317



56,814



32,752



5,606



(36,502
)


(266
)


199,721Interest expense


(15,670
)


(12,810
)


(729
)


(19
)


(13,231
)


2,221



(40,238
)Interest income


11,283



2,263



600



327



5,336



(2,221
)


17,588Foreign currency transaction gains (losses), net


12,355



27,214



(3,103
)


29



858



48



37,401Other (expense) income, net


(80
)


(355
)


16



(1
)


(226
)






(646
)Income (loss) before income tax

$
149,205


$
73,126


$
29,536


$
5,942


$
(43,765
)

$
(218
)

$
213,826Capital expenditures

$
76,649


$
115,911


$
23,654


$
13,736


$
13,815


$



$
243,765 17




---



##### 



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


IntercompanyMexico


Brazil


Argentina


Peru


and other


Eliminations


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

$
427,197


$
192,729


$
96,968


$
42,555


$
817


$
(267
)

$
759,999Digital handset and accessory revenues


5,588



9,592



8,742



3,063











26,985Operating revenues

$
432,785


$
202,321


$
105,710


$
45,618


$
817


$
(267
)

$
786,984Segment earnings (losses)

$
157,186


$
48,182


$
32,066


$
8,793


$
(38,323
)

$



$
207,904Management fee


(9,900
)














9,900







Depreciation and amortization


(35,043
)


(22,888
)


(7,626
)


(5,596
)


(1,634
)


99



(72,688
)Operating income (loss)


112,243



25,294



24,440



3,197



(30,057
)


99



135,216Interest expense


(15,100
)


(7,821
)


(630
)


(30
)


(8,872
)


2,800



(29,653
)Interest income


5,726



167



1,138



144



8,095



(2,800
)


12,470Foreign currency transaction gains (losses), net


5,858



3,664



(170
)


10



(31
)






9,331Other (expense) income, net


(78
)


(789
)


1,330



1



(1,658
)






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

$
108,649


$
20,515


$
26,108


$
3,322


$
(32,523
)

$
99


$
126,170Capital expenditures

$
63,775


$
74,730


$
15,838


$
12,860


$
6,664


$



$
173,867June 30, 2008Property, plant and equipment, net

$
893,075


$
908,871


$
214,122


$
120,327


$
103,008


$
(287
)

$
2,239,116Identifiable assets

$
2,621,717


$
1,935,827


$
460,713


$
266,309


$
730,020


$
(287
)

$
6,014,299December 31, 2007Property, plant and equipment, net

$
803,393


$
673,462


$
183,889


$
107,532


$
84,972


$
(166
)

$
1,853,082Identifiable assets

$
2,297,580


$
1,540,227


$
444,125


$
231,018


$
923,952


$
(166
)

$
5,436,736  18




---



##### 



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


20Business Overview


20Digital Handsets in Commercial Service


23Critical Accounting Policies and Estimates


23Ratio of Earnings to Fixed Charges


24Reclassifications


24Results of Operations


24a. Consolidated


25b. Nextel Mexico


31c. Nextel Brazil


34d. Nextel Argentina


37e. Nextel Peru


40f. Corporate and other


42Liquidity and Capital Resources


43Future Capital Needs and Resources


44Forward Looking Statements


47Effect of New Accounting Standards


48  19




---



##### 



Introduction    
    our consolidated financial condition and results of operations
    for the six- and three-month periods ended June 30, 2008
    and 2007; and
    significant factors which we believe could affect our
    prospective financial condition and results of operations.  Form 10-K Form 10-Q
 Business
    Overview  ® tm
    
    mobile telephone service, including advanced calling features
    such as speakerphone, conference calling, voice-mail, call
    forwarding and additional line service;
    Nextel Direct
    Connect®
    service, which allows subscribers anywhere on our network to
    talk to each other instantly, on a push-to-talk
    basis, private one-to-one call or group call;
    International Direct
    Connect®
    service, together with Sprint Nextel Corporation and
    TELUS Corporation, which allows subscribers to communicate
    instantly across national borders with our subscribers in
    Mexico, Brazil, Argentina, Peru and Chile, with Sprint Nextel
    Corporation subscribers using compatible handsets in the United
    States and with TELUS subscribers using compatible handsets in
    Canada;
    text messaging services, mobile internet services,
    e-mail
    services including
    Blackberrytm
    services, location-based services, which include the use of
    Global Positioning System (GPS) technologies, digital media
    services and advanced
    Javatm
    enabled business applications; and
    international roaming services.     20




---



##### 



Focusing on Major Business Centers in Key Latin American
    Markets.
  Targeting High Value Customers.
  Providing Differentiated Services.
  Delivering Superior Customer Service.
 21




---



##### 



Selectively Expanding our Service Areas.
  Preserving the iDEN Opportunity.
  Planning for the Future.
   22




---



##### 



Digital
    Handsets in Commercial Service    Mexico


Brazil


Argentina


Peru


Chile


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


2,140



1,290



812



477



10



4,729Net subscriber additions


296



236



85



93



6



716Digital handsets in commercial service  June 30,
    2008


2,436



1,526



897



570



16



5,445  Critical
    Accounting Policies and Estimates    Form 10-K and/or
  
    revenue recognition;
    allowance for doubtful accounts; 23




---



##### 




    depreciation of property, plant and equipment;
    amortization of intangible assets;
    asset retirement obligations;
    foreign currency;
    loss contingencies;
    stock-based compensation; and
    income taxes.  Form 10-K
 Ratio of
    Earnings to Fixed Charges  Three MonthsEndedJune 30,2008

20074.78x


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       24




---



##### 



a.
    Consolidated  % of





% ofConsolidated





Consolidated


Change fromJune 30,


Operating


June 30,


Operating


Previous Year2008


Revenues


2007


Revenues


Dollars


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

$
1,990,803



95
%

$
1,451,840



97
%

$
538,963



37
%Digital handset and accessory revenues


106,368



5
%


49,909



3
%


56,459



113
%2,097,171



100
%


1,501,749



100
%


595,422



40
%Cost of revenuesCost of service (exclusive of depreciation and amortization
    included below)


(542,992
)


(26
)%


(387,103
)


(26
)%


(155,889
)


40
%Cost of digital handsets and accessories


(293,398
)


(14
)%


(207,649
)


(14
)%


(85,749
)


41
%(836,390
)


(40
)%


(594,752
)


(40
)%


(241,638
)


41
%Selling and marketing expenses


(276,974
)


(13
)%


(196,778
)


(13
)%


(80,196
)


41
%General and administrative expenses


(392,983
)


(19
)%


(292,670
)


(19
)%


(100,313
)


34
%Depreciation and amortization


(199,305
)


(9
)%


(139,696
)


(9
)%


(59,609
)


43
%Operating income


391,519



19
%


277,853



19
%


113,666



41
%Interest expense, net


(81,626
)


(4
)%


(53,982
)


(4
)%


(27,644
)


51
%Interest income


36,528



1
%


22,682



2
%


13,846



61
%Foreign currency transaction gains, net


40,306



2
%


5,799







34,507



NMOther (expense) income, net


(5,175
)






633







(5,808
)


NMIncome before income tax provision


381,552



18
%


252,985



17
%


128,567



51
%Income tax provision


(112,709
)


(5
)%


(84,741
)


(6
)%


(27,968
)


33
%Net income

$
268,843



13
%

$
168,244



11
%

$
100,599



60
% 25




---



##### 



% of





% ofConsolidated





Consolidated


Change fromJune 30,


Operating


June 30,


Operating


Previous Year2008


Revenues


2007


Revenues


Dollars


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

$
1,043,039



94
%

$
759,999



97
%

$
283,040



37
%Digital handset and accessory revenues


60,915



6
%


26,985



3
%


33,930



126
%1,103,954



100
%


786,984



100
%


316,970



40
%Cost of revenuesCost of service (exclusive of depreciation and amortization
    included below)


(284,065
)


(26
)%


(204,019
)


(26
)%


(80,046
)


39
%Cost of digital handsets and accessories


(159,127
)


(14
)%


(110,755
)


(14
)%


(48,372
)


44
%(443,192
)


(40
)%


(314,774
)


(40
)%


(128,418
)


41
%Selling and marketing expenses


(149,750
)


(14
)%


(108,356
)


(14
)%


(41,394
)


38
%General and administrative expenses


(206,138
)


(19
)%


(155,950
)


(20
)%


(50,188
)


32
%Depreciation and amortization


(105,153
)


(9
)%


(72,688
)


(9
)%


(32,465
)


45
%Operating income


199,721



18
%


135,216



17
%


64,505



48
%Interest expense, net


(40,238
)


(4
)%


(29,653
)


(4
)%


(10,585
)


36
%Interest income


17,588



2
%


12,470



2
%


5,118



41
%Foreign currency transaction gains, net


37,401



3
%


9,331



1
%


28,070



NMOther expense, net


(646
)






(1,194
)






548



(46
)%Income before income tax provision


213,826



19
%


126,170



16
%


87,656



69
%Income tax provision


(58,552
)


(5
)%


(42,090
)


(5
)%


(16,462
)


39
%Net income

$
155,274



14
%

$
84,080



11
%

$
71,194



85
%     NM-Not Meaningful
     26




---



##### 



1.
    Operating
    revenues      2.
    Cost of
    revenues    
    $76.2 million, or 37%, and $38.2 million, or 35%,
    increases in consolidated interconnect costs resulting from 24%
    and 23% increases in consolidated interconnect minutes of use
    and an increase in the proportion of mobile-to-mobile minutes of
    use, which generally have higher per minute interconnection
    costs;
    $36.4 million, or 30%, and $19.7 million, or 31%,
    increases in consolidated direct switch and transmitter and
    receiver site costs resulting from an 18% increase in the total
    number of sites in service from June 30, 2007 to
    June 30, 2008 and an increase in costs per site; and
    $26.0 million, or 59%, and $14.3 million, or 64%,
    increases in consolidated service and repair costs mainly
    resulting from increases in the number of subscribers
    participating under our handset maintenance programs.    3.
    Selling and
    marketing expenses    
    $41.3 million, or 53%, and $22.4 million, or 54%,
    increases in consolidated indirect commissions resulting from
    33% and 35% increases in total gross subscriber additions
    generated through external sales channels and increases in
    indirect commissions earned per handset sale;
    $29.8 million, or 41%, and $17.1 million, or 45%,
    increases in consolidated payroll expenses and direct
    commissions resulting from 29% and 31% increases in total gross
    subscriber additions generated by internal sales personnel and
    higher payroll and related costs due to increases in selling and
    marketing personnel necessary to support continued sales
    growth; and 27




---



##### 




    $7.1 million, or 18%, and $0.8 million, or 3%,
    increases in consolidated advertising expenses, primarily in
    Brazil, mainly related to the launch of new markets in
    connection with our expansion plan and increased advertising
    initiatives related to overall subscriber growth.  4.
    General and
    administrative expenses    
    $34.4 million, or 46%, and $18.6 million, or 47%,
    increases in consolidated customer care expenses, mainly payroll
    and related expenses, resulting from additional customer care
    personnel necessary to support a larger customer base;
    $17.4 million, or 80%, and $9.2 million, or 78%,
    increases in consolidated bad debt expense, primarily as a
    result of the 40% increases in consolidated operating revenues
    and a decrease in collection rates in Mexico. As a result, bad
    debt expense as a percentage of revenue increased from 1.5% for
    the six months ended June 30, 2007 to 1.9% for the same
    period in 2008 and from 1.5% for the three months ended
    June 30, 2007 to 1.9% for the same period in 2008;
    $17.0 million, or 15%, and $7.9 million, or 13%,
    increases in general corporate costs largely due to higher
    personnel costs related to increases in headcount and higher
    facilities-related expenses due to continued subscriber growth
    and expansion into new areas;
    $15.6 million, or 76%, and $8.3 million, or 74%,
    increases in revenue-based taxes in Brazil that we report on a
    gross basis as both service and other revenues and general and
    administrative expenses; and
    $9.8 million, or 51%, and $3.3 million, or 29%,
    increases in stock option compensation expense, primarily
    resulting from stock options granted in April 2007 and April
    2008.  5.
    Depreciation
    and amortization    6.
    Interest
    expense, net    
    $15.6 million and $6.3 million increases in interest
    expense due to the issuance of our 3.125% convertible notes
    during the second quarter of 2007, partially offset by
    $4.3 million and $2.2 million decreases in interest
    expense due to the conversion of our 2.875% convertible notes in
    the third quarter of 2007;
    $11.2 million and $6.2 million increases,
    respectively, in interest incurred on our towers financing
    transactions and capital lease obligations in Mexico and Brazil
    primarily due to increases in both the number of towers financed
    and capital leases; and
    $7.8 million and $3.5 million of interest incurred on
    borrowings under Nextel Brazils syndicated loan facility
    that were funded between October 2007 and March 2008, partially
    offset by $2.7 million and $1.7 million decreases in
    interest expense due to a principal payment made by Nextel
    Mexico on its syndicated loan facility in April 2008.  7.
    Foreign
    currency transaction gains, net   28




---



##### 



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





% of


Selling,


Selling,Consolidated





Consolidated


General and


General and


SegmentSix Months Ended

Operating


Operating


Cost of


Cost of


Administrative


Administrative


EarningsJune 30, 2008

Revenues


Revenues


Revenues


Revenues


Expenses


Expenses


(Losses)(dollars in thousands)Nextel Mexico

$
1,063,332



51
%

$
(376,630
)


45
%

$
(295,222
)


44
%

$
391,480Nextel Brazil


651,471



31
%


(277,310
)


33
%


(198,913
)


30
%


175,248Nextel Argentina


264,516



13
%


(120,716
)


14
%


(61,983
)


9
%


81,817Nextel Peru


114,494



5
%


(58,495
)


7
%


(33,369
)


5
%


22,630Corporate and other


4,004







(3,885
)


1
%


(80,470
)


12
%


(80,351
)Intercompany eliminations


(646
)






646















Total consolidated

$
2,097,171



100
%

$
(836,390
)


100
%

$
(669,957
)


100
%   % ofConsolidated% of





% of


Selling,


Selling,Consolidated





Consolidated


General and


General and


SegmentThree Months Ended

Operating


Operating


Cost of


Cost of


Administrative


Administrative


EarningsJune 30, 2008

Revenues


Revenues


Revenues


Revenues


Expenses


Expenses


(Losses)(dollars in thousands)Nextel Mexico

$
554,960



50
%

$
(199,808
)


45
%

$
(155,424
)


44
%

$
199,728Nextel Brazil


349,986



32
%


(148,779
)


34
%


(107,349
)


30
%


93,858Nextel Argentina


138,484



13
%


(62,448
)


14
%


(33,597
)


9
%


42,439Nextel Peru


58,636



5
%


(30,253
)


7
%


(17,814
)


5
%


10,569Corporate and other


2,208







(2,224
)






(41,704
)


12
%


(41,720
)Intercompany eliminations


(320
)






320















Total consolidated

$
1,103,954



100
%

$
(443,192
)


100
%

$
(355,888
)


100
%   29




---



##### 



% ofConsolidated% of





% of


Selling,


Selling,Consolidated





Consolidated


General and


General and


SegmentSix Months Ended

Operating


Operating


Cost of


Cost of


Administrative


Administrative


EarningsJune 30, 2007

Revenues


Revenues


Revenues


Revenues


Expenses


Expenses


(Losses)(dollars in thousands)Nextel Mexico

$
832,965



55
%

$
(293,689
)


49
%

$
(228,336
)


47
%

$
310,940Nextel Brazil


374,827



25
%


(158,250
)


27
%


(122,489
)


25
%


94,088Nextel Argentina


203,755



14
%


(95,274
)


16
%


(44,654
)


9
%


63,827Nextel Peru


89,371



6
%


(46,466
)


8
%


(25,032
)


5
%


17,873Corporate and other


1,382







(1,624
)






(68,937
)


14
%


(69,179
)Intercompany eliminations


(551
)






551















Total consolidated

$
1,501,749



100
%

$
(594,752
)


100
%

$
(489,448
)


100
%   % ofConsolidated% of





% of


Selling,


Selling,Consolidated





Consolidated


General and


General and


SegmentThree Months Ended

Operating


Operating


Cost of


Cost of


Administrative


Administrative


EarningsJune 30, 2007

Revenues


Revenues


Revenues


Revenues


Expenses


Expenses


(Losses)(dollars in thousands)Nextel Mexico

$
432,785



55
%

$
(154,167
)


49
%

$
(121,432
)


46
%

$
157,186Nextel Brazil


202,321



26
%


(86,176
)


27
%


(67,963
)


26
%


48,182Nextel Argentina


105,710



13
%


(49,868
)


16
%


(23,776
)


9
%


32,066Nextel Peru


45,618



6
%


(23,908
)


8
%


(12,917
)


5
%


8,793Corporate and other


817







(922
)






(38,218
)


14
%


(38,323
)Intercompany eliminations


(267
)






267















Total consolidated

$
786,984



100
%

$
(314,774
)


100
%

$
(264,306
)


100
%     Six Months Ended June 30,2008


2007


Percent ChangeMexican peso


10.63



10.95



3
%Brazilian real


1.70



2.04



21
%Argentine peso


3.14



3.09



(2
)%   Three Months Ended June 30,2008


2007


Percent ChangeMexican peso


10.44



10.89



4
%Brazilian real


1.66



1.98



20
%Argentine peso


3.12



3.08



(1
)%  30




---



##### 



b.
    Nextel
    Mexico  % of





% ofNextel





NextelMexicos





Mexicos


Change fromJune 30,


Operating


June 30,


Operating


Previous Year2008


Revenues


2007


Revenues


Dollars


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

$
1,024,101



96
%

$
822,317



99
%

$
201,784



25
%Digital handset and accessory revenues


39,231



4
%


10,648



1
%


28,583



268
%1,063,332



100
%


832,965



100
%


230,367



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


(199,032
)


(19
)%


(160,115
)


(20
)%


(38,917
)


24
%Cost of digital handsets and accessories


(177,598
)


(16
)%


(133,574
)


(16
)%


(44,024
)


33
%(376,630
)


(35
)%


(293,689
)


(36
)%


(82,941
)


28
%Selling and marketing expenses


(156,456
)


(15
)%


(117,960
)


(14
)%


(38,496
)


33
%General and administrative expenses


(138,766
)


(13
)%


(110,376
)


(13
)%


(28,390
)


26
%Segment earnings


391,480



37
%


310,940



37
%


80,540



26
%Management fee


(16,752
)


(2
)%


(19,800
)


(2
)%


3,048



(15
)%Depreciation and amortization


(96,156
)


(9
)%


(68,214
)


(8
)%


(27,942
)


41
%Operating income


278,572



26
%


222,926



27
%


55,646



25
%Interest expense, net


(31,732
)


(3
)%


(29,312
)


(4
)%


(2,420
)


8
%Interest income


21,852



2
%


12,909



2
%


8,943



69
%Foreign currency transaction gains, net


16,515



2
%


1,208







15,307



NMOther (expense) income, net


(159
)






2,260







(2,419
)


(107
)%Income before income tax

$
285,048



27
%

$
209,991



25
%

$
75,057



36
%Three Months EndedOperating revenuesService and other revenues

$
530,786



96
%

$
427,197



99
%

$
103,589



24
%Digital handset and accessory revenues


24,174



4
%


5,588



1
%


18,586



NM554,960



100
%


432,785



100
%


122,175



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


(101,695
)


(18
)%


(83,244
)


(19
)%


(18,451
)


22
%Cost of digital handsets and accessories


(98,113
)


(18
)%


(70,923
)


(17
)%


(27,190
)


38
%(199,808
)


(36
)%


(154,167
)


(36
)%


(45,641
)


30
%Selling and marketing expenses


(83,391
)


(15
)%


(63,715
)


(15
)%


(19,676
)


31
%General and administrative expenses


(72,033
)


(13
)%


(57,717
)


(13
)%


(14,316
)


25
%Segment earnings


199,728



36
%


157,186



36
%


42,542



27
%Management fee


(8,354
)


(2
)%


(9,900
)


(2
)%


1,546



(16
)%Depreciation and amortization


(50,057
)


(9
)%


(35,043
)


(8
)%


(15,014
)


43
%Operating income


141,317



25
%


112,243



26
%


29,074



26
%Interest expense, net


(15,670
)


(3
)%


(15,100
)


(3
)%


(570
)


4
%Interest income


11,283



2
%


5,726



1
%


5,557



97
%Foreign currency transaction gains, net


12,355



3
%


5,858



1
%


6,497



111
%Other expense, net


(80
)






(78
)






(2
)


3
%Income before income tax

$
149,205



27
%

$
108,649



25
%

$
40,556



37
%     NM-Not Meaningful
 31




---



##### 



1.
    Operating
    revenues    
    35% and 33% increases in the average number of digital handsets
    in service resulting from growth in Nextel Mexicos
    existing markets, as well as the expansion of service coverage
    into new markets launched in the second half of 2007 and in
    2008; and
    $13.9 million, or 40%, and $6.4 million, or 34%,
    increases in revenues generated from Nextel Mexicos
    handset maintenance program as a result of increases in the
    number of subscribers participating in this program.   32




---



##### 



2.
    Cost of
    revenues    
    $12.1 million, or 14%, and $5.1 million, or 12%,
    increases in interconnect costs, largely as a result of 14% and
    11% increases in interconnect system minutes of use;
    $10.6 million, or 19%, and $5.5 million, or 19%,
    increases in direct switch and transmitter and receiver site
    costs resulting from a 10% increase in the number of sites in
    service from June 30, 2007 to June 30, 2008; and
    $6.8 million, or 55%, and $3.4 million, or 54%,
    increases in service and repair costs largely due to the
    increases in the number of subscribers participating in Nextel
    Mexicos handset maintenance program.    3.
    Selling and
    marketing expenses    
    $29.3 million, or 55%, and $15.7 million, or 56%,
    increases in indirect commissions, primarily due to 28% and 32%
    increases in gross subscriber additions generated by Nextel
    Mexicos external sales channels, as well as an increase in
    indirect commission per gross subscriber addition resulting from
    an increase in commission rates that Nextel Mexico implemented
    during the third quarter of 2007; and
    $10.1 million, or 29%, and $5.5 million, or 30%,
    increases in direct commissions and payroll expenses,
    principally due to 27% and 33% increases in gross subscriber
    additions generated by Nextel Mexicos internal sales
    personnel.  4.
    General and
    administrative expenses    
    $12.7 million, or 97%, and $6.4 million, or 89%,
    increases in bad debt expense, which increased as percentages of
    revenue from 1.6% and 1.7% for the six and three months ended
    June 30, 2007 to 2.4% and 2.5% for the six and three months
    ended June 30, 2008, primarily due to a decrease in account
    collections mainly related to new subscriber additions that have
    higher credit risk;
    $11.8 million, or 30%, and $6.3 million, or 31%,
    increases in customer care expenses, primarily due to increases
    in payroll and employee related expenses caused by an increase
    in customer care personnel necessary to support a growing
    customer base; and
    $2.5 million, or 26%, and $1.4 million, or 27%,
    increases in information technology expenses resulting from an
    increase in payroll and related expenses caused by more
    executive information technology personnel, as well as an
    increase in systems maintenance expenses.  5.
    Depreciation
    and amortization   33




---



##### 



6.
    Interest
    income    7.
    Foreign
    currency transaction gains, net    c.
    Nextel
    Brazil  % of





% ofNextel





NextelBrazils





Brazils


Change fromJune 30,


Operating


June 30,


Operating


Previous Year2008


Revenues


2007


Revenues


Dollars


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

$
616,584



95
%

$
357,101



95
%

$
259,483



73
%Digital handset and accessory revenues


34,887



5
%


17,726



5
%


17,161



97
%651,471



100
%


374,827



100
%


276,644



74
%Cost of revenuesCost of service (exclusive of depreciation and amortization
    included below)


(218,581
)


(34
)%


(123,296
)


(33
)%


(95,285
)


77
%Cost of digital handsets and accessories


(58,729
)


(9
)%


(34,954
)


(9
)%


(23,775
)


68
%(277,310
)


(43
)%


(158,250
)


(42
)%


(119,060
)


75
%Selling and marketing expenses


(78,930
)


(12
)%


(49,620
)


(13
)%


(29,310
)


59
%General and administrative expenses


(119,983
)


(18
)%


(72,869
)


(20
)%


(47,114
)


65
%Segment earnings


175,248



27
%


94,088



25
%


81,160



86
%Depreciation and amortization


(68,993
)


(11
)%


(42,657
)


(11
)%


(26,336
)


62
%Operating income


106,255



16
%


51,431



14
%


54,824



107
%Interest expense, net


(26,075
)


(4
)%


(14,342
)


(4
)%


(11,733
)


82
%Interest income


3,260







314







2,946



NMForeign currency transaction gains, net


25,467



4
%


4,239



1
%


21,228



NMOther expense, net


(1,552
)






(1,554
)






2



Income before income tax

$
107,355



16
%

$
40,088



11
%

$
67,267



168
%Three Months EndedOperating revenuesService and other revenues

$
330,268



94
%

$
192,729



95
%

$
137,539



71
%Digital handset and accessory revenues


19,718



6
%


9,592



5
%


10,126



106
%349,986



100
%


202,321



100
%


147,665



73
%Cost of revenuesCost of service (exclusive of depreciation and amortization
    included below)


(117,694
)


(34
)%


(67,299
)


(34
)%


(50,395
)


75
%Cost of digital handsets and accessories


(31,085
)


(9
)%


(18,877
)


(9
)%


(12,208
)


65
%(148,779
)


(43
)%


(86,176
)


(43
)%


(62,603
)


73
%Selling and marketing expenses


(43,598
)


(12
)%


(29,023
)


(14
)%


(14,575
)


50
%General and administrative expenses


(63,751
)


(18
)%


(38,940
)


(19
)%


(24,811
)


64
%Segment earnings


93,858



27
%


48,182



24
%


45,676



95
%Depreciation and amortization


(37,044
)


(11
)%


(22,888
)


(11
)%


(14,156
)


62
%Operating income


56,814



16
%


25,294



13
%


31,520



125
%Interest expense, net


(12,810
)


(4
)%


(7,821
)


(4
)%


(4,989
)


64
%Interest income


2,263



1
%


167







2,096



NMForeign currency transaction gains, net


27,214



8
%


3,664



2
%


23,550



NMOther expense, net


(355
)






(789
)


(1
)%


434



(55
)%Income before income tax

$
73,126



21
%

$
20,515



10
%

$
52,611



256
%     NM-Not Meaningful
 34




---



##### 



1.
    Operating
    revenues    
    42% increases in the average number of digital handsets in
    service over both periods resulting from growth in Nextel
    Brazils existing markets and the expansion of service
    coverage into new markets in connection with its balanced growth
    and expansion objectives;
    21% and 20% appreciation of the Brazilian real against the
    U.S. dollar;
    $18.1 million, or 72%, and $9.6 million, or 71%,
    increases in revenues generated from Nextel Brazils
    handset maintenance program as a result of 47% and 42% increases
    in the number of subscribers participating in this
    program; and
    slight increases in local currency-based average revenue per
    subscriber.    2.
    Cost of
    revenues    
    $56.8 million, or 88%, and $29.4 million, or 82%,
    increases in interconnect costs resulting from 51% increases in
    interconnect minutes of use over both periods, as well as
    increases in the proportion of mobile-to-mobile minutes of use,
    which generally have higher per minute costs;
    $20.1 million, or 48%, and $10.4 million, or 48%,
    increases in direct switch and transmitter and receiver site
    costs resulting from a 28% increase in the number of sites in
    service from June 30, 2007 to June 30, 2008; and
    $13.8 million, or 127%, and $8.5 million, or 152%,
    increases in service and repair costs largely due to 47% and 42%
    increases in the number of subscribers participating in Nextel
    Brazils handset maintenance program, a change in the mix
    of handsets repaired and increased costs of repairs. 35




---



##### 



3.
    Selling and
    marketing expenses    
    $13.5 million, or 58%, and $7.8 million, or 60%,
    increases in payroll and direct commissions largely as a result
    of 38% increases in gross subscriber additions over both periods
    generated by Nextel Brazils internal sales force and
    higher payroll and related costs related to increases in selling
    and marketing personnel necessary to support continued sales
    growth;
    $8.7 million, or 78%, and $3.0 million, or 39%,
    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 races, a
    professional racecar event, and its continued print and media
    campaigns for various products and services, consistent with
    Nextel Brazils growth objectives; and
    $5.9 million, or 44%, and $3.1 million, or 41%,
    increases in indirect commissions resulting from 26% and 25%
    increases in gross subscriber additions generated through Nextel
    Brazils external sales channels.    4.
    General and
    administrative expenses    
    $16.3 million, or 77%, and $8.9 million, or 78%,
    increases in customer care expenses resulting from increases in
    customer care personnel necessary to support a larger customer
    base, as well as increases in the number of retail stores;
    $15.6 million, or 76%, and $8.3 million, or 74%,
    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 73% and 71%
    increases in Nextel Brazils service and other revenues;
    $7.0 million, or 38%, and $3.3 million, or 35%,
    increases in general corporate costs primarily resulting from
    increases in general and administrative personnel necessary to
    support Nextel Brazils expansion, as well as increases in
    facilities costs due to expansion into new markets;
    $4.5 million, or 76%, and $2.5 million, or 80%,
    increases in bad debt expense as a result of the 74% and 73%
    increases in Nextel Brazils operating revenues. Bad debt
    expense as a percentage of consolidated operating revenues
    remained stable at 1.6% for all periods in 2008 and
    2007; and
    $3.8 million, or 57%, and $2.1 million, or 61%,
    increases in information technology expenses related to the
    expansion of Nextel Brazils network and the implementation
    of new systems.    5.
    Depreciation
    and amortization   36




---



##### 



6.
    Interest
    expense, net    7.
    Foreign
    currency transaction gains, net    d.
    Nextel
    Argentina  % of





% ofNextel





NextelArgentinas





Argentinas


Change fromJune 30,


Operating


June 30,


Operating


Previous Year2008


Revenues


2007


Revenues


Dollars


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

$
241,121



91
%

$
188,101



92
%

$
53,020



28
%Digital handset and accessory revenues


23,395



9
%


15,654



8
%


7,741



49
%264,516



100
%


203,755



100
%


60,761



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


(85,287
)


(32
)%


(70,544
)


(35
)%


(14,743
)


21
%Cost of digital handsets and accessories


(35,429
)


(13
)%


(24,730
)


(12
)%


(10,699
)


43
%(120,716
)


(45
)%


(95,274
)


(47
)%


(25,442
)


27
%Selling and marketing expenses


(21,152
)


(8
)%


(15,131
)


(7
)%


(6,021
)


40
%General and administrative expenses


(40,831
)


(16
)%


(29,523
)


(15
)%


(11,308
)


38
%Segment earnings


81,817



31
%


63,827



31
%


17,990



28
%Depreciation and amortization


(18,355
)


(7
)%


(14,868
)


(7
)%


(3,487
)


23
%Operating income


63,462



24
%


48,959



24
%


14,503



30
%Interest expense, net


(1,387
)


(1
)%


(1,124
)


(1
)%


(263
)


23
%Interest income


1,867



1
%


2,037



1
%


(170
)


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


(2,673
)


(1
)%


306







(2,979
)


NMOther income, net


44







1,577



1
%


(1,533
)


(97
)%Income before income tax

$
61,313



23
%

$
51,755



25
%

$
9,558



18
% 37




---



##### 



% of





% ofNextel





NextelArgentinas





Argentinas


Change fromJune 30,


Operating


June 30,


Operating


Previous Year2008


Revenues


2007


Revenues


Dollars


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

$
126,154



91
%

$
96,968



92
%

$
29,186



30
%Digital handset and accessory revenues


12,330



9
%


8,742



8
%


3,588



41
%138,484



100
%


105,710



100
%


32,774



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


(43,931
)


(32
)%


(36,428
)


(34
)%


(7,503
)


21
%Cost of digital handsets and accessories


(18,517
)


(13
)%


(13,440
)


(13
)%


(5,077
)


38
%(62,448
)


(45
)%


(49,868
)


(47
)%


(12,580
)


25
%Selling and marketing expenses


(11,489
)


(8
)%


(8,042
)


(8
)%


(3,447
)


43
%General and administrative expenses


(22,108
)


(16
)%


(15,734
)


(15
)%


(6,374
)


41
%Segment earnings


42,439



31
%


32,066



30
%


10,373



32
%Depreciation and amortization


(9,687
)


(7
)%


(7,626
)


(7
)%


(2,061
)


27
%Operating income


32,752



24
%


24,440



23
%


8,312



34
%Interest expense, net


(729
)


(1
)%


(630
)






(99
)


16
%Interest income


600







1,138



1
%


(538
)


(47
)%Foreign currency transaction losses, net


(3,103
)


(2
)%


(170
)






(2,933
)


NMOther income, net


16







1,330



1
%


(1,314
)


(99
)%Income before income tax

$
29,536



21
%

$
26,108



25
%

$
3,428



13
%     NM-Not Meaningful
    1.
    Operating
    revenues    
    24% increases in the average number of digital handsets in
    service, resulting mostly from growth in Nextel Argentinas
    existing markets;
    increases in average revenue per subscriber; and
    $7.7 million, or 39%, and $4.0 million, or 39%,
    increases in revenues generated from Nextel Argentinas
    handset maintenance program as a result of 27% and 25% increases
    in the number of subscribers participating in the program.   38




---



##### 



2.
    Cost of
    revenues    
    $6.9 million, or 19%, and $3.6 million, or 19%,
    increases in interconnect costs largely as a result
    14% 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;
    $3.3 million, or 19%, and $1.2 million, or 13%,
    increases in service and repair costs, largely due to 27% and
    25% increases in the number of subscribers participating in
    Nextel Argentinas handset maintenance program; and
    $2.8 million, or 18%, and $2.1 million, or 27%,
    increases in direct switch and transmitter and receiver site
    costs due to a 24% increase in the number of sites in service
    from June 30, 2007 to June 30, 2008.    3.
    Selling and
    marketing expenses    
    $3.2 million, or 46%, and $1.8 million, or 47%,
    increases in indirect commissions, principally resulting from
    29% increases in gross subscriber additions generated by Nextel
    Argentinas external sales channels, as well as increases
    in indirect commissions earned per subscriber addition; and
    $3.0 million, or 58%, and $1.9 million, or 77%,
    increases in payroll and direct commissions, mostly due to 15%
    and 16% increases in gross subscriber additions generated by
    Nextel Argentinas internal sales personnel, as well as
    higher payroll and related costs related to increases in selling
    and marketing personnel necessary to support continued sales
    growth and significant increases in salaries consistent with the
    ongoing inflation pressures that we are experiencing in
    Argentina.  4.
    General and
    administrative expenses    
    $5.5 million, or 33%, and $3.2 million, or 37%,
    increases in general corporate costs resulting from certain
    revenue-based taxes and increases in costs related to billing
    and collections services, as well as increases in payroll and
    related expenses caused by increases in general and
    administrative personnel and significant increases in salaries
    consistent with the ongoing inflation pressures that we are
    experiencing in Argentina;
    $3.6 million, or 49%, and $2.0 million, or 50%,
    increases in customer care expenses resulting from increases in
    customer care personnel necessary to support a larger customer
    base and significant increases in salaries consistent with the
    ongoing inflation pressures that we are experiencing in
    Argentina; and
    $1.6 million, or 41%, and $0.9 million, or 42%,
    increases in information technology expenses caused by increases
    in information technology personnel and higher software
    maintenance costs.  5.
    Depreciation
    and amortization    6.
    Foreign
    currency transaction (losses) gains, net   39




---



##### 



e.
    Nextel
    Peru  % of





% ofNextel





NextelPerus





Perus


Change fromJune 30,


Operating


June 30,


Operating


Previous Year2008


Revenues


2007


Revenues


Dollars


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

$
105,639



92
%

$
83,490



93
%

$
22,149



27
%Digital handset and accessory revenues


8,855



8
%


5,881



7
%


2,974



51
%114,494



100
%


89,371



100
%


25,123



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


(37,879
)


(33
)%


(32,635
)


(37
)%


(5,244
)


16
%Cost of digital handsets and accessories


(20,616
)


(18
)%


(13,831
)


(15
)%


(6,785
)


49
%(58,495
)


(51
)%


(46,466
)


(52
)%


(12,029
)


26
%Selling and marketing expenses


(13,829
)


(12
)%


(9,323
)


(10
)%


(4,506
)


48
%General and administrative expenses


(19,540
)


(17
)%


(15,709
)


(18
)%


(3,831
)


24
%Segment earnings


22,630



20
%


17,873



20
%


4,757



27
%Depreciation and amortization


(9,889
)


(9
)%


(10,884
)


(12
)%


995



(9
)%Operating income


12,741



11
%


6,989



8
%


5,752



82
%Interest expense, net


(36
)






(67
)






31



(46
)%Interest income


618







341







277



81
%Foreign currency transaction (losses) gains, net


(162
)






54







(216
)


NMOther income, net










1







(1
)


(100
)%Income before income tax

$
13,161



11
%

$
7,318



8
%

$
5,843



80
%Three Months EndedOperating revenuesService and other revenues

$
53,943



92
%

$
42,555



93
%

$
11,388



27
%Digital handset and accessory revenues


4,693



8
%


3,063



7
%


1,630



53
%58,636



100
%


45,618



100
%


13,018



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


(19,411
)


(33
)%


(16,745
)


(37
)%


(2,666
)


16
%Cost of digital handsets and accessories


(10,842
)


(19
)%


(7,163
)


(16
)%


(3,679
)


51
%(30,253
)


(52
)%


(23,908
)


(53
)%


(6,345
)


27
%Selling and marketing expenses


(7,561
)


(13
)%


(5,173
)


(11
)%


(2,388
)


46
%General and administrative expenses


(10,253
)


(17
)%


(7,744
)


(17
)%


(2,509
)


32
%Segment earnings


10,569



18
%


8,793



19
%


1,776



20
%Depreciation and amortization


(4,963
)


(8
)%


(5,596
)


(12
)%


633



(11
)%Operating income


5,606



10
%


3,197



7
%


2,409



75
%Interest expense, net


(19
)






(30
)






11



(37
)%Interest income


327







144







183



127
%Foreign currency transaction gains, net


29







10







19



190
%Other (expense) income, net


(1
)






1







(2
)


(200
)%Income before income tax

$
5,942



10
%

$
3,322



7
%

$
2,620



79
%     NM-Not Meaningful
 40




---



##### 



1.
    Operating
    revenues      2.
    Cost of
    revenues    
    $2.0 million, or 63%, and $1.2 million, or 72%,
    increases in service and repair costs largely due to 72% and 82%
    increases in the number of subscribers participating in Nextel
    Perus handset maintenance program; and
    $2.0 million, or 27%, and $1.2 million, or 32%,
    increases in direct switch and transmitter and receiver site
    costs due to a 7% increase in the number of sites in service
    from June 30, 2007 to June 30, 2008, as well as
    increases in operating and maintenance costs per site.    3.
    Selling and
    marketing expenses    
    $2.6 million, or 112%, and $1.5 million, or 122%,
    increases in indirect commissions as a result of 81% and 80%
    increases in handset sales by Nextel Perus external sales
    channels; and
    $2.1 million, or 41%, and $1.1 million, or 41%,
    increases in direct commissions and payroll expenses principally
    due to 29% and 21% increases in handset sales by Nextel
    Perus sales personnel.  4.
    General and
    administrative expenses    
    $2.1 million, or 39%, and $1.1 million, or 39%,
    increases in customer care expenses, mainly caused by increases
    in customer care and billing operations personnel needed to
    support a growing customer base; and
    $1.8 million, or 31%, and $1.1 million, or 37%,
    increases in general corporate costs resulting from increases in
    payroll and related expenses caused by increases in general and
    administrative personnel. 41




---



##### 



f.
    Corporate
    and other  % of





% ofCorporate





Corporateand other





and other


Change fromJune 30,


Operating


June 30,


Operating


Previous Year2008


Revenues


2007


Revenues


Dollars


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

$
4,004



100
%

$
1,382



100
%

$
2,622



190
%Digital handset and accessory revenues






















4,004



100
%


1,382



100
%


2,622



190
%Cost of revenuesCost of service (exclusive of depreciation and amortization
    included below)


(2,859
)


(71
)%


(1,064
)


(77
)%


(1,795
)


169
%Cost of digital handsets and accessories


(1,026
)


(26
)%


(560
)


(41
)%


(466
)


83
%(3,885
)


(97
)%


(1,624
)


(118
)%


(2,261
)


139
%Selling and marketing expenses


(6,607
)


(165
)%


(4,744
)


NM



(1,863
)


39
%General and administrative expenses


(73,863
)


NM



(64,193
)


NM



(9,670
)


15
%Segment losses


(80,351
)


NM



(69,179
)


NM



(11,172
)


16
%Management fee


16,800



NM



19,800



NM



(3,000
)


(15
)%Depreciation and amortization


(5,792
)


(145
)%


(3,270
)


(237
)%


(2,522
)


77
%Operating loss


(69,343
)


NM



(52,649
)


NM



(16,694
)


32
%Interest expense, net


(26,585
)


NM



(14,335
)


NM



(12,250
)


85
%Interest income


13,120



NM



12,279



NM



841



7
%Foreign currency transaction gains (losses), net


1,111



28
%


(8
)


(1
)%


1,119



NMOther expense, net


(3,508
)


(88
)%


(1,651
)


(119
)%


(1,857
)


112
%Loss before income tax

$
(85,205
)


NM


$
(56,364
)


NM


$
(28,841
)


51
%Three Months EndedOperating revenuesService and other revenues

$
2,208



100
%

$
817



100
%

$
1,391



170
%Digital handset and accessory revenues






















2,208



100
%


817



100
%


1,391



170
%Cost of revenuesCost of service (exclusive of depreciation and amortization
    included below)


(1,654
)


(75
)%


(570
)


(70
)%


(1,084
)


190
%Cost of digital handsets and accessories


(570
)


(26
)%


(352
)


(43
)%


(218
)


62
%(2,224
)


(101
)%


(922
)


(113
)%


(1,302
)


141
%Selling and marketing expenses


(3,711
)


(168
)%


(2,403
)


(294
)%


(1,308
)


54
%General and administrative expenses


(37,993
)


NM



(35,815
)


NM



(2,178
)


6
%Segment losses


(41,720
)


NM



(38,323
)


NM



(3,397
)


9
%Management fee


8,402



NM



9,900



NM



(1,498
)


(15
)%Depreciation and amortization


(3,184
)


(144
)%


(1,634
)


(200
)%


(1,550
)


95
%Operating loss


(36,502
)


NM



(30,057
)


NM



(6,445
)


21
%Interest expense, net


(13,231
)


NM



(8,872
)


NM



(4,359
)


49
%Interest income


5,336



242
%


8,095



NM



(2,759
)


(34
)%Foreign currency transaction gains (losses), net


858



39
%


(31
)


(4
)%


889



NMOther expense, net


(226
)


(10
)%


(1,658
)


(203
)%


1,432



(86
)%Loss before income tax

$
(43,765
)


NM


$
(32,523
)


NM


$
(11,242
)


35
%     NM-Not Meaningful
 42




---



##### 



start-up
  1.
    General and
    administrative expenses    2.
    Interest
    expense, net   Liquidity
    and Capital Resources        Cash
    Flows
  Six Months EndedJune 30,2008


2007


ChangeNet cash provided by operating activities

$
316,005


$
227,882


$
88,123Net cash used in investing activities


(346,968
)


(377,345
)


30,377Net cash (used in) provided by financing activities


(91,434
)


923,690



(1,015,124
)Effect of exchange rate changes on cash and cash equivalents


32,012



(575
)


32,587Net (decrease) increase in cash and cash equivalents


(90,385
)


773,652



(864,037
)Cash and cash equivalents, beginning of period


1,370,165



708,591



661,574Cash and cash equivalents, end of period

$
1,279,780


$
1,482,243


$
(202,463
)  43




---



##### 



Future
    Capital Needs and Resources  Capital Resources.
    
    the amount of revenue we are able to generate and collect from
    our customers;
    the amount of operating expenses required to provide our
    services;
    the cost of acquiring and retaining customers, including the
    subsidies we incur to provide handsets to both our new and
    existing customers;
    our ability to continue to increase the size of our subscriber
    base; and
    fluctuations in foreign exchange rates.  Capital Needs and Contractual
    Obligations.
  
    operating expenses relating to our networks;
    capital expenditures to expand and enhance our networks, as
    discussed below under Capital Expenditures;
    operating and capital expenditures related to the deployment of
    a next generation network in Peru;
    future spectrum or other related purchases;
    debt service requirements, including tower financing and capital
    lease obligations;
    cash taxes; and
    other general corporate expenditures. 44




---



##### 



Payments due by periodLess than








More thanContractual Obligations

1 Year


1-3 Years


3-5 Years


5 Years


Total(in thousands)Convertible notes(1)

$
47,125


$
94,250


$
1,256,750


$
470,354


$
1,868,479Tower financing obligations(1)


62,131



124,272



124,294



374,759



685,456Syndicated loan facilities(2)


94,678



390,147



132,635



12,833



630,293Capital lease obligations(3)


15,497



31,388



47,453



107,165



201,503Spectrum fees(4)


15,294



30,588



30,588



211,400



287,870Operating leases(5)


138,371



224,171



149,724



196,325



708,591Purchase obligations(6)


1,098,584



72,337



17,664







1,188,585Other long-term obligations(7)


15,973



21,465



28,290



188,512



254,240Total contractual commitments

$
1,487,653


$
988,618


$
1,787,398


$
1,561,348


$
5,825,017     (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 include principal and interest payments associated
    with Nextel Mexico and Nextel Brazils syndicated loan
    facilities.(3)
    
    These amounts represent principal and interest payments due
    under our co-location agreements, including with American Tower,
    and our existing corporate aircraft lease. The amounts related
    to our existing aircraft lease exclude amounts that are
    contingently due in the event of our default under the lease,
    but do include remaining amounts due under the letter of credit
    provided for our new corporate aircraft.(4)
    
    These amounts do not include variable fees based on certain
    operating revenues and are subject to increases in the Mexican
    Consumer Pricing Index.(5)
    
    These amounts principally include future lease costs related to
    our transmitter and receiver sites and switches and office
    facilities.(6)
    
    These amounts include maximum contractual purchase obligations
    under various agreements with our vendors, as well as estimated
    amounts related to interconnection agreements in Mexico.(7)
    
    These amounts include our current estimates of asset retirement
    obligations based on our expectations as to future retirement
    costs, inflation rates and timing of retirements, as well as
    amounts related to our FIN 48 liabilities.    Capital Expenditures.
 45




---



##### 




    the expansion of the coverage of our networks to new market
    areas;
    the construction of additional transmitter and receiver sites to
    increase system capacity and maintain system quality and the
    installation of related switching equipment in some of our
    existing market coverage areas;
    the enhancement of our network coverage around some major market
    areas;
    the deployment within required timeframes of a next generation
    network that utilizes the 1.9 GHz spectrum that we acquired
    in Peru in 2007;
    potential funding of future spectrum acquisitions and
    development and deployment of any future next generation
    networks; and
    non-network
    related information technology projects.    Future Outlook.
    
    cash and cash equivalents on hand and short-term-investments
    available to fund our operations;
    expected cash flows from operations;
    the anticipated level of capital expenditures, including minimum
    build-out requirements, relating to the deployment of the next
    generation network that utilizes the 1.9 GHz spectrum we
    acquired in Peru;
    our scheduled debt service; and
    income taxes.   46




---



##### 




    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 the United States or in Latin
    America and in the market segments that we are targeting for our
    services;
    the political and social conditions in the countries in which we
    operate, including political instability, which may affect the
    economies of our markets and the regulatory schemes in these
    countries;
    the impact of foreign exchange volatility in our markets as
    compared to the U.S. dollar and related currency
    depreciation in countries in which our operating companies
    conduct business;
    reasonable access to and the successful performance of the
    technology being deployed in our service areas, and improvements
    thereon, including technology deployed in connection with the
    introduction of digital two-way mobile data or Internet
    connectivity services in our markets;
    the availability of adequate quantities of system infrastructure
    and subscriber equipment and components at reasonable pricing to
    meet our service deployment and marketing plans and customer
    demand;
    Motorolas ability and willingness to provide handsets and
    related equipment and software applications or to develop new
    technologies or features for us, including the timely
    development and availability of new handsets with expanded
    applications and features;
    the risk of deploying new technologies, including the potential
    need for additional funding, the risk that new services
    supported by the new technology will not attract enough
    subscribers to support the related costs of deploying or
    operating the new technology, the need to significantly increase
    our employee base and the potential distraction of management; 47




---



##### 




    our ability to successfully scale our billing, collection,
    customer care and similar back-office operations to keep pace
    with customer growth, increased system usage rates and growth or
    to successfully deploy new systems that support those functions;
    the success of efforts to improve and satisfactorily address any
    issues relating to our network performance;
    future legislation or regulatory actions relating to our SMR
    services, other wireless communication services or
    telecommunications generally;
    the ability to achieve and maintain market penetration and
    average subscriber revenue levels sufficient to provide
    financial viability to our network business;
    the quality and price of similar or comparable wireless
    communications services offered or to be offered by our
    competitors, including providers of cellular services and
    personal communications services;
    market acceptance of our new service offerings;
    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 2007 annual
    report on
    Form 10-K. Effect of
    New Accounting Standards  No. 157-1, No. 157-1, No. 157-2, No. 157-2, No. 157-2,
     48




---



##### 



No. FAS 142-3, FAS 142-3. FAS 142-3 FAS 142-3 FAS 142-3 FAS 142-3
  14-1, 14-1. FSP APB 14-1 14-1 14-1 14-1
  Item 3.
    Quantitative
    and Qualitative Disclosures About Market Risk.   49




---



##### 




    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 a banking firm for our interest
    rate swap.    Year of Maturity


June 30, 2008


December 31, 20071 Year


2 Years


3 Years


4 Years


5 Years


Thereafter


Total


Fair Value


Total


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

$
1,781


$
1,872


$
1,885


$
1,220,645


$



$
350,037


$
1,576,220


$
1,448,024


$
1,576,982


$
1,489,671Average Interest Rate


10.0
%


10.0
%


10.0
%


3.2
%






2.8
%


3.2
%






3.2
%Fixed Rate (MP)

$
44,122


$
25,798


$
7,725


$
9,081


$
10,688


$
132,431


$
229,845


$
229,845


$
211,801


$
211,801Average Interest Rate


11.9
%


12.4
%


15.4
%


15.4
%


15.4
%


15.2
%


14.4
%






14.5
%Fixed Rate (BR)

$
3,853


$
4,431


$
5,183


$
6,161


$
7,507


$
88,019


$
115,154


$
115,154


$
96,134


$
96,134Average Interest Rate


19.0
%


19.7
%


20.4
%


21.1
%


21.8
%


24.2
%


23.3
%






24.8
%Variable Rate (US$)

$



$
81,039


$
237,639


$
81,039


$
44,611


$
12,272


$
456,600


$
456,600


$
331,600


$
331,600Average Interest Rate






4.8
%


4.4
%


4.8
%


4.8
%


4.8
%


4.6
%






6.8
%Variable Rate (MP)

$
26,415


$
13,208


$



$



$



$



$
39,623


$
39,623


$
50,000


$
50,000Average Interest Rate


8.8
%


8.8
%


















8.8
%






8.7
%Interest Rate Swap:Variable to Fixed

$
13,958


$
6,979


$



$



$



$



$
20,937


$
(236
)

$
26,420


$
(546
)Average Pay Rate


10.8
%


10.8
%


















10.8
%






10.8
%Average Receive Rate


8.8
%


8.8
%


















8.8
%






8.7
%  50




---



##### 



Item 4.
    Controls
    and Procedures.  Evaluation
    of Disclosure Controls and Procedures
      Changes
    in Internal Control over Financial Reporting
   51




---



##### 



PART II 
    OTHER INFORMATION  Item 1.
    Legal
    Proceedings.      Item 1A.
    Risk
    Factors.  Form 10-K 6.
    Government regulations determine how we operate in various
    countries which could limit our growth and strategic
    plans,
  Form 10-K.
  Item 2.
    Unregistered
    Sales of Equity Securities and Use of Proceeds.    Approximate DollarTotal Number of


Value of Shares ThatShares Purchased as


May Yet BeTotal Number of


Average Price


Part of Publicly


Purchased Under thePeriod

Shares Purchased


Per Share


Announced Plan


PlanApril 1, 2008  April 30, 2008





$




May 1, 2008  May 31, 2008


1,432,931



48.87



1,432,931June 1, 2008  June 30, 2008


1,394,561



50.22



1,394,561Total


2,827,492



49.53



2,827,492


$
257,446,814  52




---



##### 



Item 4.
    Submission
    of Matters to a Vote of Security Holders.      BrokerVotes


NonNominee

Votes For


Withheld


VotesNeal P. Goldman


148,486,229



882,553



N/ACharles M. Herington


148,710,336



658,446



N/AJohn W. Risner


148,073,786



1,294,996



N/A     BrokerVotes

Votes

NonNominee

Votes For

Against

Withheld

VotesRatification of Independent Registered Public Accounting Firm


148,426,419



686,992



255,371



N/A     Item 6.
    Exhibits.  ExhibitNumber

Exhibit Description10
.1

2004 Incentive Compensation Plan, as Amended Effective
    July 22, 2008.10
.2

Change of Control Severance Plan, as Amended and Restated
    Effective July 22, 2008.10
.3

Severance Plan, as Amended and Restated Effective July 22,
    2008.12
.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.  53




---



##### 



SIGNATURE
    By:
    /s/  DANIEL
    E. FREIMAN        54




---



##### 



EXHIBIT INDEX
  ExhibitNumber

Exhibit Description10
.1

2004 Incentive Compensation Plan, as Amended Effective
    July 22, 2008.10
.2

Change of Control Severance Plan, as Amended and Restated
    Effective July 22, 2008.10
.3

Severance Plan, as Amended and Restated Effective July 22,
    2008.12
.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.  55