SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549


                                    Form 10-Q


  (Mark One)
     [ X ]      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                SECURITIES EXCHANGE ACT OF 1934

                For the quarterly period ended September 30, 1996

                                               OR

      [ ]       TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                SECURITIES EXCHANGE ACT OF 1934


                         Commission File Number 0-19656


                           NEXTEL COMMUNICATIONS, INC.
             (Exact name of registrant as specified in its charter)

                Delaware                                36-3939651
     (State or other jurisdiction of       (I.R.S. Employer Identification No.)
      incorporation or organization)

   1505 Farm Credit Drive, McLean, VA                     22102
(Address of principal executive offices)                (Zip Code)

       Registrant's telephone number, including area code: (703) 394-3000


     Indicate  by check mark  whether the  registrant  (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days: Yes X No

     Indicate the number of shares  outstanding  of each of issuer's  classes of
common stock as of the latest practicable date:

                                              Number of Shares Outstanding
             Title of Class                        on November 1, 1996
 
Class A Common Stock, $0.001 par value      209,994,463 (including 1,969,440
                                                 shares held in treasury)

    Class B Non-Voting Common Stock,                    17,830,000
            $0.001 par value



<PAGE>

                            NEXTEL COMMUNICATIONS, INC.

                                       INDEX


                                                                       Page No.
Part I   Financial Information.

         Item 1.  Financial Statements - Unaudited.

                Condensed Consolidated Balance Sheets -
                  December 31, 1995 and September 30, 1996.                   3

                Condensed Consolidated Statements of Operations -
                  Nine Months Ended September 30, 1995 and 1996.              4

                Condensed Consolidated Statements of Operations -
                  Three Months Ended September 30, 1995 and 1996.             5

                Condensed Consolidated Statement of Changes in
                  Stockholders' Equity - Nine Months Ended
                  September 30, 1996.                                         6

                Condensed Consolidated Statements of Cash Flows -
                  Nine Months Ended September 30, 1995 and 1996.              7

                Notes to Condensed Consolidated Interim Financial
                  Statements.                                                 8

         Item 2.  Management's Discussion and Analysis of Financial
                  Condition and Results of Operations.                       12

Part II  Other Information.

         Item 1. Legal Proceedings.                                          21

         Item 6. Exhibits and Reports on Form 8-K.                           21



                                      -2-
<PAGE>
                                       PART I
Item 1.   Financial Statements.

                    NEXTEL COMMUNICATIONS, INC. AND SUBSIDIARIES
                        Condensed Consolidated Balance Sheets
                               (Dollars in Thousands)
                                      Unaudited

                                                     December 31, September 30,
                                                          1995           1996

ASSETS
Current assets:
  Cash and cash equivalents                             $340,826       $219,508
  Marketable securities                                   68,443          4,998
  Accounts receivable, less allowance for
   doubtful accounts of $5,232 and $7,169                 41,451         74,237
  Radios and accessories                                  21,220         34,308
  Other                                                   32,721         53,275
                                                        --------       --------
        Total current assets                             504,661        386,326

Property, plant and equipment - net                     1,192,204     1,430,954

Intangible assets - net                                 3,549,622     3,886,286

Other noncurrent assets                                  266,340        285,752
                                                        --------       --------
                                                       $5,512,827    $5,989,318
                                                       ==========    ==========

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Accounts payable, accrued expenses and other          $363,732       $189,197
  Current portion of long-term debt                        1,277            869
                                                        --------       --------
        Total current liabilities                        365,009        190,066

Deferred income taxes                                    549,277        376,738

Long-term debt                                          1,653,400     2,470,995
                                                        ---------      ---------
        Total liabilities                               2,567,686     3,037,799
                                                        ---------      ---------

Commitments and contingencies

Stockholders' equity:
  Preferred stock, Class A convertible redeemable,
   shares outstanding 8,163,265 and 8,163,265            300,000        300,000
  Preferred stock, Class B convertible, shares
    outstanding 82 and 82                                     --            --
  Common stock, Class A, shares outstanding
   175,749,359 and 209,680,304                               176            210
  Common stock, Class B, non-voting convertible,
   shares outstanding 17,830,000 and 17,830,000               18             18
  Additional paid-in capital                           3,197,528      3,591,213
  Accumulated deficit                                   (579,231)      (976,860)
  Treasury shares - 24,860 and 1,969,440 shares             (768)        (1,487)
  Net unrealized gain on investments                      32,054         42,688
  Notes receivable - incentive equity plan                (1,018)        (1,050)
  Deferred compensation - net                             (3,618)        (3,213)
                                                        --------       --------
Total stockholders' equity                             2,945,141      2,951,519
                                                        ---------      ---------
                                                      $5,512,827     $5,989,318
                                                      ==========     ==========

        See notes to Condensed Consolidated Interim Financial Statements

                                      -3-
<PAGE>


                    NEXTEL COMMUNICATIONS, INC. AND SUBSIDIARIES
                   Condensed Consolidated Statements of Operations
                For The Nine Months Ended September 30, 1995 and 1996
                      (Dollars in Thousands, Except Share Data)
                                      Unaudited


                                                          1995           1996
                                                          ----           ----

REVENUES:
  Radio service revenue                               $  83,338       $ 208,737
  Analog equipment sales and maintenance                 27,414          28,240
                                                      ---------       ---------
                                                        110,752         236,977

 COSTS AND EXPENSES RELATED TO REVENUES:
  Cost of radio service revenue                          70,245         156,708
  Cost of analog equipment sales and maintenance         21,083          20,848
  Selling, general and administrative                   127,462         234,725
  Expenses related to corporate reorganization           17,372              --
  Depreciation and amortization                         151,392         291,698
                                                        387,554         703,979

OPERATING LOSS                                         (276,802)       (467,002)
                                                      ---------       ---------

OTHER INCOME (EXPENSE):
  Interest expense                                      (71,560)       (165,524)
  Interest income                                        19,644          17,953
                                                      ---------       ---------
                                                        (51,916)       (147,571)

LOSS BEFORE INCOME TAX BENEFIT                         (328,718)       (614,573)

INCOME TAX BENEFIT                                      116,403         216,944
                                                      ---------       ---------

NET LOSS                                              $(212,315)      $(397,629)
                                                      =========       =========

NET LOSS PER COMMON SHARE                             $    (1.68)    $    (1.80)
                                                      ==========      ==========

WEIGHTED AVERAGE NUMBER OF
  COMMON SHARES OUTSTANDING                           126,636,000   221,309,000
                                                      ===========    ===========



        See Notes to Condensed Consolidated Interim Financial Statements

                                      -4-
<PAGE>


                    NEXTEL COMMUNICATIONS, INC. AND SUBSIDIARIES
                   Condensed Consolidated Statements of Operations
               For the Three Months Ended September 30, 1995 and 1996
                      (Dollars in Thousands, Except Share Data)
                                      Unaudited


                                                          1995           1996
                                                          ----           ----

REVENUES:
  Radio service revenue                               $   41,319      $  82,884
  Analog equipment sales and maintenance                   9,755          8,156
                                                      ----------      ---------
                                                          51,074         91,040

 COSTS AND EXPENSES RELATED TO REVENUES:
  Cost of radio service revenue                           38,038         54,695
  Cost of analog equipment sales and maintenance           7,617          6,129
  Selling, general and administrative                     52,839         83,985
  Expenses related to corporate reorganization            17,372             --
  Depreciation and amortization                           68,648        105,869
                                                      ----------      ---------
                                                         184,514        250,678

OPERATING LOSS                                          (133,440)      (159,638)
                                                      ----------      ---------

OTHER INCOME (EXPENSE):
  Interest expense                                       (28,203)       (58,783)
  Interest income                                          8,134          4,744
                                                      ----------      ---------
                                                         (20,069)       (54,039)

LOSS BEFORE INCOME TAX BENEFIT                          (153,509)      (213,677)

INCOME TAX BENEFIT                                        51,375         64,794
                                                      ----------      ---------

NET LOSS                                              $ (102,134)     $(148,883)
                                                      ==========      =========

NET LOSS PER COMMON SHARE                             $     (0.61)   $    (0.66)
                                                      ===========     ==========

WEIGHTED AVERAGE NUMBER OF
  COMMON SHARES OUTSTANDING                           166,881,000   225,367,000
                                                      ===========   ===========

       See Notes to Condensed Consolidated Interim Financial Statements.

                                      -5-
<PAGE>
NEXTEL COMMUNICATIONS, INC. AND SUBSIDIARIES
Condensed Consolidated Statement of Changes In Stockholders' Equity
For the Nine Months Ended September 30, 1996
(Dollars in Thousands)
Unaudited
<TABLE>
------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
                                                                                                             NOTES
                                                                                                    NET      RECEIVABLE
                    CLASS A    CLASS B    CLASS A  CLASS B    ADDITIONAL                         UNREALIZED  - INCENTIVE  DEFERRED
                    PREFERRED  PREFERRED  COMMON   COMMON     PAID-IN     ACCUMULATED  TREASURY  GAIN ON     EQUITY       COMPEN-
                    STOCK      STOCK      STOCK    STOCK      CAPITAL      DEFICIT      SHARES   INVESTMENTS PLAN         SATION
                    -----      -----      -----    -----      -------     --------     -------   ----------- -----        ------
<S>                 <C>        <C>        <C>      <C>        <C>         <C>          <C>       <C>         <C>          <C>

BALANCE,
  JANUARY 1, 1996   $300,000   $   --     $  176   $  18      $3,197,528  $(579,231)   $ (768)    $32,054    $(1,018)     $ (3,618)

  Issuances under
     incentive 
     equity plan,
     warrants and
     other                                     3                   6,640                 (719)

  Common stock
     issued for 
     acquisitions                             23                 282,687

  Common stock
    acquired by 
    Comcast                                    8                  99,897

  Deferred
    compensation
    and related
    amortization
    and collection
    of notes 
    receivable                                                     4,461                                         (32)         (405)

Net unrealized
    appreciation
    on investments                                                                                 10,634

  Net loss                                                                 (397,629)
                   --------    ------     -------  -----      ----------  ----------   --------   -------    --------     ----------
BALANCE,
  SEPTEMBER 30,
           1996    $300,000    $  --      $  209   $  18      $3,591,213  $(976,860)   $(1,487)   $42,688    $(1,050)     $ (3,213)
                   ========    ======     ======   =====      ==========  ==========   ========   =======    ========     =========

</TABLE>







       See Notes to Condensed Consolidayed Interim Financial Statements.
                                      -6-
<PAGE>


                  NEXTEL COMMUNICATIONS, INC. AND SUBSIDIARIES
                Condensed Consolidated Statements of Cash Flows
              For the Nine Months Ended September 30, 1995 and 1996
                             (Dollars in Thousands)
                                    Unaudited

                                                          1995           1996
                                                          ----           ----
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net loss                                             $(212,315)     $(397,629)
  Adjustment to reconcile net loss to net
   cash used in operating activities                    101,058         83,974
                                                       --------       --------

        Net cash used in operating activities          (111,257)      (313,655)
                                                       --------       --------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Decrease in other assets                                8,283          9,491
  Payments for acquisitions and purchase of licenses,
   net of cash acquired                                 (64,688)        33,665
  Capital expenditures                                 (121,493)       (46,211)
  Decrease in marketable securities                      88,557         64,452
                                                       --------       --------

  Net cash (used in) provided by investing
   activities                                            (89,341)      61,397
                                                     -------------- ------------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Revolving line of credit borrowings (repayments), net       --       (268,704)
  Long-term borrowings                                        --        331,408
  Other long-term repayments, net                         (1,606)        (1,068)
  Debt issuance costs                                         --        (37,336)
  Common stock issued, options exercised                   1,753          6,735
  Common stock issued                                     12,645         99,905
  Preferred stock issued                                 300,000            --

        Net cash provided by financing activities       312,792        130,940
                                                       --------       --------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS        112,194       (121,318)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD          301,679        340,826
                                                       --------       --------
CASH AND CASH EQUIVALENTS, END OF PERIOD               $413,873       $219,508
                                                       ========       ========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW
  INFORMATION:
  Interest paid                                        $  7,274       $ 29,779
                                                       ========       ========
  Taxes paid                                           $    387       $  1,085
                                                       ========       ========

SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING
  AND FINANCING ACTIVITIES:
  Acquisition of equipment, including non-cash
   capitalized interest                                $108,964       $125,241
                                                       ========       ========

  Borrowings from vendor to finance equipment
   purchases                                           $  9,742       $220,221
                                                       ========       ========

        See Notes to Condensed Consolidated Interim Financial Statements

                                      -7-
<PAGE>

                  NEXTEL COMMUNICATIONS, INC. AND SUBSIDIARIES
          Notes to Condensed Consolidated Interim Financial Statements
                               September 30, 1996
                                    Unaudited

Note 1 - Basis of Presentation

    The  condensed   consolidated   interim   financial   statements  of  Nextel
Communications,  Inc.  and  subsidiaries  ("Nextel" or the  "Company")  included
herein have been prepared by the Company  without  audit,  pursuant to the rules
and regulations of the Securities and Exchange Commission (the "Commission") and
reflect all adjustments that are, in the opinion of management,  necessary for a
fair statement of the results for the interim periods. All adjustments made were
normal recurring accruals.

    The interim  financial  statements  should be read in  conjunction  with the
financial  statements and notes thereto contained in the Company's Annual Report
on Form 10-K for the year ended  December  31, 1995.  Operating  results for the
interim periods are not necessarily indicative of results for an entire year.

    Effective  January 1, 1996,  the  Company  adopted  Statement  of  Financial
Accounting  Standards  No. 121,  "Accounting  for the  Impairment  of Long-Lived
Assets and for Long-Lived  Assets to Be Disposed of" ("SFAS 121").  There was no
material effect from the adoption of SFAS 121.

    Certain amounts presented for the periods ended September 30, 1995 have been
reclassified to conform to the  presentation for the periods ended September 30,
1996.

Note 2 - Business Combinations and Other Significant Transactions

    Dial Page  Merger.  On January 30,  1996,  the merger  with Dial Page,  Inc.
("Dial Page") was consummated (the "Dial Page Merger"), whereby the stockholders
of Dial Page received  approximately  26,800,000 shares of Class A Common Stock,
par value $0.001 per share ("Class A Common  Stock"),  or rights to receive such
stock,  having an aggregate value of approximately  $277,892,000 on the contract
date.

    The  Dial  Page  Merger  has  been  accounted  for by the  purchase  method.
Accordingly,  assets and liabilities acquired have been reflected at fair value,
which may be subject to further  refinement.  The operating results of Dial Page
are included in the condensed  consolidated  statements  of operations  from the
acquisition date.

    Pro Forma  Operations Data. The following pro forma statements of operations
data gives effect to the Dial Page  Merger,  and to the  completion  on July 28,
1995  of the  transactions  with  Motorola,  Inc.  ("Motorola")  (the  "Motorola
Transaction")  and with OneComm  Corporation  ("OneComm") (the "OneComm Merger")
and to the completion on July 31, 1995 of the  transaction  with American Mobile
Systems Incorporated ("AMS") (the "AMS Transaction"), assuming such transactions
had been  consummated  at the  beginning of the earliest  period  presented  (in
thousands, except per share data):

                                      Nine Months Ended
                                        September 30,
                                  ---------------------------
                                      1995          1996
                                      ----          ----
     Revenue                      $  224,249     $  239,815
                                  ==========     ==========
     Net loss                     $ (387,054)    $ (405,525)
                                  ==========     ==========
     Net loss per share           $    (1.72)    $    (1.81)
                                  ==========     ==========

                                      -8-
<PAGE>

    The pro forma information is not necessarily  indicative of the results that
would have actually  occurred had the transactions been consummated on the dates
indicated,  nor are they necessarily  indicative of future operating  results of
the Company.

    Comcast Exercise of Purchase Rights. On February 9, 1996, Comcast FCI, Inc.,
a  subsidiary  of  Comcast  Corporation  (collectively,   "Comcast"),  purchased
8,155,506  shares of Class A Common Stock for $99,905,000 in connection with its
exercise of its  anti-dilution  rights to purchase shares in connection with the
Dial Page Merger.

Note 3 - Digital Mobile Network Equipment Sales and Related Costs

    Effective  January 1, 1996, in order to conform its  presentation to that of
the  majority  of wireless  communications  companies,  the  Company  classified
equipment  sales  revenue,  and related  costs for the operation of its advanced
mobile communications  systems employing digital technology (the "Digital Mobile
networks") within selling,  general and administrative expenses. The loss on the
sale of subscriber  units used in the Digital Mobile networks  ("Digital  Mobile
units")  results from the  Company's  subsidy of Digital  Mobile units sales and
represents  marketing  costs for the  Digital  Mobile  network.  Sales of analog
subscriber units result in a contribution to gross margin that is anticipated to
continue in the  foreseeable  future;  accordingly,  sales of analog  subscriber
units will continue to be classified  as revenue and the  associated  costs will
continue  to be  classified  as  cost  and  expenses  related  to  revenue.  The
statements  of  operations  for the  three  months  and the  nine  months  ended
September 30, 1995 have been reclassified to conform with this presentation.

    Equipment  sales and related costs of the Company's  Digital  Mobile network
operations are included within selling,  general and administrative  expenses as
follows (in thousands):

                                   Three Months Ended       Nine Months Ended
                                     September 30,            September 30,
                                  ---------------------  -----------------------
                                    1995        1996        1995         1996
                                    ----        ----        ----         ----
     Equipment sales              $ 14,269    $32,059     $ 34,580     $  90,353
     Cost of equipment sales        16,210     36,105      37,649        100,998
                                  --------    -------     -------      ---------
                                  $ (1,941)   $(4,046)    $(3,069)     $(10,645)
                                  ========    =======     =======      ========

Note 4 - Net Loss Per Share

    The net loss per share is based on the weighted average number of voting and
non-voting  common  shares  outstanding  during the periods and does not include
common stock equivalents since their effect would be anti-dilutive.

Note 5 - Long-Term Debt

    Nextel, Nextel Finance Company ("NFC"), a wholly-owned subsidiary of Nextel,
and certain  subsidiaries  of Nextel entered into definitive  agreements,  which
became effective on September 30, 1996 with respect to a secured credit facility
arranged  by  Chase  Securities,   Inc.,  J.P.  Morgan   Securities,   Inc.  and
Toronto-Dominion  Securities (USA), Inc. (the "Bank Credit Facility").  The Bank
Credit  Facility  provides  for  up  to  $1,655,000,000  of  secured  financing,
consisting of  $1,085,000,000 in revolving loans and $570,000,000 in term loans.
The  commitments to make revolving  loans are reduced  beginning  March 31, 2001
with final  maturities  of the  revolving  loans  occurring  on March 31,  2003.
Quarterly  principal  payments  on the term loans  commence  March 31, 2001 with
final  maturities  on June 30, 2003.  Concurrently  therewith,  Nextel,  NFC and
certain  subsidiaries of Nextel entered into definitive  agreements,  which also
became  effective  on  September  30,  1996,  with  respect  to

                                      -9-
<PAGE>
the  amendment, restatement and consolidation of the previously existing
financing  arrangements with  Motorola  and  NTFC  Capital  Corporation
("NTFC")  (the  "Vendor  Credit Facility"). The Vendor Credit Facility
supersedes the prior financing agreements and  provides for up to $345,000,000
of secured  financing,  consisting  of a $195,000,000  revolving  loan and
$150,000,000  in term loans  with, revolving credit commitment  reductions and
term loan payments  parallel to those of the Bank Credit Facility.

    Borrowings  under the Bank Credit  Facility and Vendor  Credit  Facility are
ratably  secured  by  liens  on  assets  of  Nextel's   subsidiaries   that  are
"restricted"  subsidiaries under the terms of Nextel's public indentures.  As of
September 30, 1996,  Nextel had drawn  $368,000,000  of its available  financing
under the Bank Credit Facility, leaving an aggregate of $1,287,000,000 available
for borrowing under such facility.  Additionally,  Nextel had drawn $150,000,000
of its  available  financing  under  the  Vendor  Credit  Facility,  leaving  an
aggregate of  $195,000,000  available for  borrowing  under such  facility.  The
proceeds  from these  borrowings  were used  primarily  to  partially  repay the
outstanding  principal and accrued interest under the prior financing agreements
with Motorola and NTFC.  Interest on the outstanding  principal  balances of the
two Credit  Facilities is calculated based on an adjusted rate calculated either
on the Prime Rate or the London Interbank Offered Rate (LIBOR).  As of September
30, 1996, interest on the loans ranged from 9.25% to 10.25% .

Note 6 - Interest Rate Swap

    In October  1996,  NFC entered into an interest rate swap  agreement  with a
notional amount of $320,000,000 which will convert floating rate debt into fixed
rate obligations with an effective interest rate of 5.9%. This swap commenced on
October 2, 1996 for a one-year period expiring on October 2, 1997.

Note 7 - Subsequent Events

    Pittencrieff  Transaction.  In October  1996,  the  Company  entered  into a
definitive agreement with Pittencrieff Communications, Inc. ("Pittencrieff"),  a
specialized mobile radio ("SMR") operator with SMR licenses in Texas,  Oklahoma,
New  Mexico  and  Arizona,  providing  for the  merger  of  Pittencrieff  with a
wholly-owned   indirect   subsidiary   of   the   Company   (the   "Pittencrieff
Transaction").  Pursuant to the Pittencrieff Transaction, the Company will issue
a maximum of approximately  8,780,000 shares of Class A Common Stock, subject to
certain adjustments, in exchange for all of the outstanding shares (or rights to
acquire shares) of Pittencrieff stock. The maximum dollar value of the shares of
Class A Common  Stock to be issued to the  Pittencrieff  shareholders  is set at
$170,000,000 (subject to certain adjustments).  Accordingly, if the price of the
Class  A  Common  Stock  exceeds  $19.36  at the  closing  of  the  Pittencrieff
Transaction,  the number of shares to be issued to the Pittencrieff shareholders
would be decreased so that the total maximum dollar value threshold would not be
exceeded.  The  closing  of the  Pittencrieff  Transaction,  which is subject to
certain  conditions,  including  regulatory  approval  and the  approval  of the
Pittencrieff  shareholders,  is expected to occur during the first half of 1997.
The  Pittencrieff  Transaction,  when  completed,  will be accounted  for by the
purchase method.

    Mobilcom  Transaction.  In August 1996,  a  wholly-owned  subsidiary  of the
Company  entered into an agreement to purchase up to an additional  19.8% equity
interest  in  Corporacion  Mobilcom  S.A.  de C.V.  ("Mobilcom"),  a Mexican SMR
operator,  from certain  shareholders  of Mobilcom in two  tranches.  In October
1996,  such  subsidiary  completed  the  acquisition  of the  first  tranche  by
acquiring  an  additional  11.6%  equity  interest in  Mobilcom in exchange  for
1,319,902  shares of the Company's Class A Common Stock. As of November 1, 1996,
the Company's equity interest in Mobilcom was approximately 30.1%, not including
any of the  Mobilcom  shares that would be  acquired  upon  consummation  of the
second  tranche  purchase nor any of the Mobilcom  shares  currently  subject to
options or other arrangements  providing for potential  acquisition thereof by a
wholly-owned subsidiary of the Company.

                                      -10-
<PAGE>
        WVB Transaction.  In October 1996, the Company entered into an agreement
and plan of merger with Wireless Ventures of Brazil, Inc.("WVB"), an SMR
operator in Brazil,  providing  for the merger of WVB with a  wholly-owned
subsidiary of Nextel (the "WVB  Transaction").  Nextel will issue  $186,300,000
of its Class A Common  Stock to the WVB  shareholders in exchange for 81% of the
outstanding shares of WVB common  stock.  The exact number of shares of Class A
Common Stock to be issued to the WVB  shareholders  will be determined based on
the average closing  price of the Class A Common Stock on the Nasdaq Stock
Market during the 20-day  trading  period  beginning on October 29,  1996. The
closing of the WVB Transaction is subject to United States regulatory approvals,
the approval of the WVB shareholders and customary closing conditions. The WVB
Transaction, when completed, will be accounted for by the purchase method.


                                    * * * * *

                                      -11-

<PAGE>

Item 2. Management's Discussion and Analysis of Financial Condition and Results
        of Operations.

Overview

    The  following  is a  discussion  of the  condensed  consolidated  financial
condition  and  results of  operations  of Nextel  for the nine and three  month
periods ended September 30, 1995 and 1996, and certain factors that could affect
the Company's prospective financial condition.

    To further its  objective of achieving  nationwide  Digital  Mobile  network
coverage,  Nextel consummated the Motorola  Transaction,  the OneComm Merger and
the AMS Transaction in July 1995 and consummated the Dial Page Merger on January
30, 1996 (hereinafter  referred to collectively as the "Acquisitions").  Also in
July 1995, pursuant to a securities purchase agreement dated as of April 4, 1995
between the Company,  Digital Radio,  L.L.C. (the "McCaw Investor") and Craig O.
McCaw,  the  Company  consummated  an equity  investment  in Nextel by the McCaw
Investor,  pursuant to which  Nextel  received  net equity  investment  proceeds
totaling approximately  $312,645,000  (including amounts received in April 1995)
and issued  shares of common and preferred  stock and stock options  expiring at
various dates through July 28, 2001 (the "McCaw Transaction"). Funds received in
the McCaw Transaction are being used for the implementation and operation of the
Digital Mobile networks and to satisfy other cash requirements of the Company.

    In April 1996, the Federal  Communications  Commission (the "FCC") concluded
its  auction  of 900 MHz SMR  frequencies.  Nextel  successfully  bid a total of
approximately $29,079,000 for 177 ten-channel licenses in markets throughout the
United States,  including  Alaska and Hawaii.  The Company made final payment to
the FCC for these  licenses in July 1996.  The Company  intends to use the newly
acquired 900 MHz  licenses in its ongoing  wireless  communications  operations,
including  as part  of its  ongoing  process  of  transferring  its  analog  SMR
customers  from  certain  800  MHz  frequencies  to 900  MHz or  other  800  MHz
frequencies.

    In  October  1996,  the  Company  announced  the  Pittencrieff  Transaction,
pursuant  to  which  Pittencrieff  will  merge  with  a  wholly-owned   indirect
subsidiary of the Company. The closing of the Pittencrieff Transaction, which is
subject to certain conditions, including regulatory approval and the approval of
the  Pittencrieff  shareholders,  is expected to occur  during the first half of
1997.

    The Company also has pursued various international  investment and operating
relationships in wireless communications ventures. In 1994, the Company invested
an aggregate of approximately $18,100,000 in cash and exchanged 2,500,000 shares
of Class A Common Stock for an equity interest in Clearnet  Communications  Inc.
("Clearnet")  that as of September 30, 1996  represented  an  approximate  19.3%
equity interest  (representing an approximate 1.7% voting interest) in Clearnet.
Clearnet operates wireless  communications systems in Canada and in 1995 was one
of two entities awarded a nationwide  personal  communications  services ("PCS")
license in Canada.

    In 1994 and  1995,  the  Company  invested  an  aggregate  of  approximately
$57,200,000 for an approximate  18% equity  interest in Mobilcom,  a Mexican SMR
operator,  and obtained options to increase its equity interest in Mobilcom.  In
August 1996, a wholly-owned  subsidiary of the Company entered into an agreement
to purchase up to an additional  19.8% equity  interest in Corporacion  Mobilcom
S.A. de C.V. ("Mobilcom"),  a Mexican SMR operator, from certain shareholders of
Mobilcom in two  tranches.  In October,  1996,  such  subsidiary  completed  the
acquisition  of the first  tranche  by  acquiring  an  additional  11.6%  equity
interest in Mobilcom in exchange for  1,319,902  shares of Class A Common Stock.
As  of  November  1,  1996,  the  Company's  equity  interest  in  Mobilcom  was
approximately  30.1%,  not  including  any of the Mobilcom  shares that would be
acquired  upon  consummation  of the  second  tranche  purchase  nor  any of the
Mobilcom shares currently subject to options or other arrangements providing for
potential acquisition thereof by a wholly-owned subsidiary of the Company.

                                      -12-

<PAGE>
    In  1995,   the  Company,   through  its   wholly-owned   subsidiary   McCaw
International, Ltd. ("McCaw International"),  invested approximately $10,000,000
for an approximate 25.2% equity-equivalent  interest and committed an additional
$13,200,000  in loan  funding  in the  initial  phase of a newly  created  Group
Special Mobile digital cellular  telephone system operating in Shanghai,  China.
McCaw International  advanced a total of $10,300,000 of such loan funding to the
Shanghai operations in the first nine months of 1996.

    In June 1996,  McCaw  International  invested  $16,000,000  for a 30% equity
interest  in  Infocom  Communications  Network,  Inc.  ("Infocom"),  a  wireless
communications  company  in  the  Philippines.   Infocom  currently  operates  a
nationwide  paging  business  and has 100 pairs of 800 MHz SMR  channels  in the
Philippines.  Infocom was recently  awarded a 25-year  license by the Philippine
government  to  provide   wireless   communications   services   throughout  the
Philippines.  The license allows Infocom to provide paging and SMR services, and
gives Infocom the right to seek  authority to operate a personal  communications
network  throughout  the  Philippines.  Infocom plans to use its SMR channels to
implement a national digital network using the same  Motorola-developed  digital
technology deployed by Nextel in its United States Digital Mobile networks (such
technology  is  referred  to as the  "Integrated  Digital  Enhanced  Network" or
"iDEN").

    In August 1996, McCaw  International  obtained 100% ownership of Com Control
Comunicacion  Controlada S.A. (renamed McCaw Argentina S.A., "McCaw Argentina"),
an Argentine  SMR company with 800 MHz SMR licenses in areas  covering more that
17  million  people.   Through  McCaw   International,   the  Company   invested
approximately  $15,600,000  in the form of cash and  equipment to acquire  McCaw
Argentina.  The acquisition has been accounted for by the purchase method. McCaw
Argentina  intends to provide wireless  communications  services in Buenos Aires
and the next three  largest  cities in  Argentina.  McCaw  Argentina  will focus
initially on providing  high-quality  analog SMR service and ultimately  digital
service.

    In October  1996,  the Company  announced the WVB  Transaction,  pursuant to
which the Company  will issue  $186,300,000  of its Class A Common  Stock to WVB
shareholders in exchange for 81% of the  outstanding  shares of WVB common stock
and WVB will merge with a wholly-owned  subsidiary of Nextel. The closing of the
WVB Transaction is subject to United States regulatory  approvals,  the approval
of the WVB shareholders and customary closing conditions.

    The  Company  intends to  continue  to  investigate  and pursue  investment,
operating and other relationships in, with or concerning wireless communications
ventures outside the United States, to the extent the Company believes that such
opportunities  present the  potential to achieve  attractive  rates of return on
investment or to provide  important  strategic or other benefits to the Company.
For the most part,  such  activities  have been, and are expected to continue to
be,  pursued  through  subsidiaries  of  the  Company  that  are  classified  as
"unrestricted"  for  purposes of the  Company's  public  indentures.  While such
classification  gives those  subsidiaries  the flexibility to participate in and
structure  transactions  in ways that  comply with the  covenants  in the public
indentures that are applicable to the Company and its "restricted" subsidiaries,
those   indentures  do  contain  certain   limitations   with  respect  to  such
"unrestricted"  subsidiaries,  including  limits  on  the  amount  and  type  of
financial  support that they may receive  from the Company and its  "restricted"
subsidiaries.   Currently,   the  Company  believes  that  these  "unrestricted"
subsidiaries  have or can obtain (in a manner  consistent  with the terms of the
public  indentures)  adequate  funding to satisfy their  existing and reasonably
expected  commitments.  The  pursuit of  international  wireless  communications
opportunities in the future by such "unrestricted" subsidiaries, however, may be
dependent  on, among other  factors,  their ability to secure  necessary  equity
and/or debt financing  from third  parties.  There can be no assurance that such
financing  could be  obtained  or, if  obtainable,  would be made  available  on
acceptable   terms.  See  also  "--Future   Capital  Needs  and  Resources"  and
"--Forward-Looking Statements."

                                      -13-
<PAGE>
    Prior to the second  quarter of 1996,  the Company  implemented  its Digital
Mobile networks in its market areas using  Motorola's  "first  generation"  iDEN
technology.  During that time frame, the Company  encountered certain technology
and system performance issues relating to the "first generation" iDEN technology
that resulted in delays in the implementation of its plans to deploy its Digital
Mobile  networks and in the  commencement of aggressive  marketing  efforts with
respect to its  communications  products and services,  particularly  its mobile
telephone  services.  These  technology  and system  performance  issues related
primarily to the voice transmission quality of the mobile telephone service.

    In response to these issues,  the Company and Motorola have undertaken,  and
continue  to  undertake,   system   enhancement   efforts  to  address   various
circumstances  believed to  adversely  affect  system  performance  and customer
satisfaction, particularly those associated with voice transmission quality. The
Company  anticipates that such system  enhancement  efforts will be a continuing
component of the normal ongoing technology  optimization process.  Additionally,
independent  of such system  enhancement  efforts,  the Company,  together  with
Motorola,  is pursuing a significant program directed toward the development and
deployment of modifications to the "first generation" iDEN technology  platform,
to be known as Reconfigured iDEN, designed  principally to produce  improvements
in voice transmission quality. Nextel and Motorola have been encouraged by their
experience to date in the Reconfigured iDEN development and deployment  process.
All significant technology performance  benchmarks,  development process targets
and  key  event  schedules   relating  to  the  development  and  deployment  of
Reconfigured  iDEN have been  achieved or  satisfied  to date  substantially  as
contemplated and originally agreed to by Nextel and Motorola.

    Based on its experiences  with the Reconfigured  iDEN technology,  including
the  feedback   received  in  customer  trials  and  various  other  inputs  and
considerations,  the Company announced the first full-scale commercial launch of
the Reconfigured  iDEN Digital Mobile network in the Chicago market in the third
quarter  of 1996,  accompanied  by the  commencement  of a more  broadly-focused
marketing  campaign  in that market  area.  In October and  November  1996,  the
Company  announced   full-scale   commercial   launches,   accompanied  by  more
broadly-focused marketing campaigns, in the Atlanta, Boston, Denver, Detroit and
Las Vegas markets.  The Company's  commercial launch activities in these markets
represent the first phase of an anticipated  rapid nationwide  deployment of the
Reconfigured  iDEN  technology  in  the  Company's  significant  Digital  Mobile
markets. The Company currently is developing and refining a nationwide build-out
plan for Digital Mobile networks  incorporating the Reconfigured iDEN technology
based on an anticipated  implementation  schedule during 1996 to 1998,  which it
currently   expects  will  involve   budgeted  capital   expenditures   totaling
approximately  $1.2 billion.  In this connection,  the Company  anticipates that
purchases of  Motorola-manufactured  infrastructure equipment will represent the
largest category of capital spending.  Since June 1996, Nextel has placed orders
with  Motorola  totaling  more than $300 million of products  incorporating  the
Reconfigured  iDEN  technology,  including system  infrastructure  equipment and
related  software  and the new,  compact  Reconfigured  iDEN  handsets  that the
Company plans to market  nationally,  principally  under the  "PowerFone"(R)(TM)
brand name.  Assuming the  successful  and timely  completion of such  build-out
plan,  the  Company  expects  that its Digital  Mobile  networks  would  provide
coverage to areas representing approximately 85% of the United States population
by the  end of  1998.  Implementation  of  such a  rapid  nationwide  deployment
strategy  for  Reconfigured  iDEN  would  likely  significantly  accelerate  the
Company's  use of and  needs  for  capital  resources  and  would  therefore  be
dependent on, among other things,  availability of necessary  capital.  See also
"--Future Capital Needs and Resources" and "--Forward-Looking Statements."


                                      -14-

<PAGE>
Results of Operations

   Nine Months Ended September 30, 1996 vs. Nine Months Ended September 30, 1995

    Total revenues for the nine months ended September 30, 1996 increased 114.0%
to  $236,977,000,  compared to $110,752,000  for the nine months ended September
30, 1995.  Radio  service  revenue for the nine months ended  September 30, 1996
increased  150.5% to  $208,737,000,  compared to $83,338,000 for the nine months
ended September 30, 1995. Analog equipment sales and maintenance revenue for the
nine months ended September 30, 1996 increased 3.0% to $28,240,000,  compared to
$27,414,000 for the nine months ended September 30, 1995. Digital Mobile network
equipment  revenue,  which is classified as selling,  general and administrative
expenses  (see  Note  3  to  the  Condensed   Consolidated   Interim   Financial
Statements),  for the nine months ended  September 30, 1996 increased  161.3% to
$90,353,000,  compared to  $34,580,000  for the nine months ended  September 30,
1995.

    Radio  Service.  The increase in radio  service  revenue was  principally  a
result  of an  increase  in  analog  SMR units in  service  attributable  to the
completed  Acquisitions,  the  commencement of Digital Mobile network service in
certain  markets  during 1996 and the increased  sales in markets that commenced
Digital Mobile network services in 1994 and 1995.

    The total  number of units in service as of  September  30,  1996  increased
25.6% to approximately 1,044,000, from approximately 831,000 as of September 30,
1995,  reflecting  growth  primarily  from the  commencement  of Digital  Mobile
network  service in certain  markets during 1996 and increased  sales in markets
that commenced  Digital Mobile network service in 1994 and 1995 and, to a lesser
extent,  from the  Acquisitions.  The  following  table  summarizes  the overall
growth:

                             Units in Service as of
                                  September 30,
                                              1995       1996     Change

     Analog SMR service                     770,000    816,000    46,000
     Digital Mobile Network service          61,000    228,000   167,000
                                            -------   --------   -------
         Total                              831,000   1,044,000  213,000
                                            =======   =========  =======

    The average churn rate for the Digital  Mobile  networks  operation was less
than 1% per  month for the nine  months  ended  September  30,  1996.  There was
insufficient  history of customer  activity on the Digital Mobile networks as of
September  30, 1995 to derive a meaningful  churn rate for the nine months ended
on such date.  The average churn rate for the analog SMR operations for the nine
months ended  September 30, 1996 was 1.8%, up from the rate of 1.4% for the nine
months ended September 30, 1995 (not including,  for purposes of the nine months
ended September 30, 1995, the OneComm,  AMS,  Motorola and Dial Page operations,
for  which  consolidated  and  consistent  churn  data for the  period  prior to
completion of the respective  transactions is not  available).  The increase was
due principally to reductions in analog capacity resulting from the migration of
frequencies  from the analog SMR systems to Digital  Mobile  networks and higher
churn  rates  experienced  in  the  operations  represented  by  certain  of the
Acquisitions.

        Equipment  Sales and  Maintenance  Revenue.  Total  equipment  sales and
maintenance  revenue  (before the  reclassification  described  in Note 3 to the
Condensed  Consolidated Interim Financial  Statements) for the nine months ended
September 30, 1996 increased 91.3% to $118,593,000,  compared to $61,994,000 for
the nine months ended September 30, 1995. The increase resulted principally from
equipment sales revenue from Digital Mobile unit sales.  Analog  equipment sales
and  maintenance  revenue  increased   slightly,   primarily  due  to

                                      -15-
<PAGE>
increased maintenance revenue associated  with analog SMR units acquired in the
Motorola Transaction. Nextel's analog SMR unit sales are expected to decrease
as a result of the  Company's  continuing  focus away from the sale of analog
SMR radios and migration of analog SMR customers to the Digital Mobile  network
service in the markets in which Digital Mobile networks have begun operating.

    Costs and Expenses  Related to Revenues.  Cost of radio service  revenue for
the nine months  ended  September  30, 1996  increased  123.1% to  $156,708,000,
compared to $70,245,000 for the nine months ended September 30, 1995,  primarily
as a result of an  increase in analog SMR units in service  attributable  to the
completed  Acquisitions,  the  commencement of Digital Mobile network service in
certain  markets  during 1996 and the increased  sales in markets that commenced
Digital  Mobile network  service in 1994 and 1995.  The direct costs  associated
with the Digital Mobile  networks,  such as site rental and telephone  expenses,
will continue to increase as networks are placed into service.

    Selling,  general and  administrative  expenses  for the nine  months  ended
September 30, 1996 increased 84.2% to $234,725,000, compared to $127,462,000 for
the  nine  months  ended  September  30,  1995.  The  increase  related  to  the
Acquisitions  and  increased  staffing  and  other  activities  to  support  the
implementation  and operation of the Digital Mobile networks.  Selling,  general
and administrative  expenses include a loss on Digital Mobile equipment sales of
$10,645,000,  compared  to a loss  of  $3,069,000  for  the  nine  months  ended
September  30,  1995,  reflecting,  in part,  the  continued  effect of customer
subsidies or discounts  on  increased  sales of Digital  Mobile units during the
nine months ended  September  30,  1996.  The Company  anticipates  that it will
continue to offer  customers  subsidies or discounts in connection with the sale
and installation of Digital Mobile units as a part of its overall Digital Mobile
network service offering.

    Expenses related to the corporate  reorganization  for the nine months ended
September 30, 1995 were a result of the estimated  employee and facility related
costs resulting from the consolidation, resizing and relocation of the Company's
headquarters  and customer care operations in connection with the  Acquisitions.
No such costs were recorded during the nine months ended September 30, 1996.

    Depreciation  and  amortization for the nine months ended September 30, 1996
increased 92.7% to  $291,698,000,  compared to $151,392,000  for the nine months
ended  September 30, 1995,  reflecting  the effect of the  Acquisitions  and the
activation of additional Digital Mobile networks.  System assets relating to the
development of Digital Mobile networks  represent the largest portion of capital
expenditures  during the period.  Depreciation  and  amortization of such assets
begins upon  commencement  of  commercial  service in each  market.  The Company
anticipates that depreciation and amortization expense will continue to increase
as a result of the activation of additional  Digital Mobile networks during 1996
and 1997,  the  deployment  of  additional  depreciable  assets in markets where
commercial  service has commenced and as "first  generation" iDEN Digital Mobile
networks are converted to the  Reconfigured  iDEN  technology  platform over the
next several years.

    Interest  income for the nine months ended September 30, 1996 decreased 8.6%
to $17,953,000,  compared to $19,644,000 for the nine months ended September 30,
1995. The decrease  relates to the  utilization of cash for the  development and
implementation   of  the  Company's   Digital   Mobile   networks  and  for  the
Acquisitions.  Interest  expense for the nine months  ended  September  30, 1996
increased  131.3% to  $165,524,000,  compared to $71,560,000 for the nine months
ended September 30, 1995,  reflecting increased interest expense attributable to
the assumption of OneComm's  Senior  Redeemable  Discount Notes due 2004 and the
Dial Call  Senior  Redeemable  Discount  Notes due 2004 and 2005  assumed in the
Acquisitions and interest expense attributable to increased borrowings under the
Company's  Bank Credit  Facility  and Vendor  Credit  Facility.  The increase in
interest  expense was also  attributable to a reduction in capitalized  interest
relating to construction in progress of Digital Mobile networks. During the nine
months  ended   September  30,  1996,  the  Company   capitalized   interest  of
$22,784,000,  compared to  $30,342,000  for the nine months ended  September 30,
1995.

                                      -16-
<PAGE>
    The  deferred  tax  benefit  for the nine months  ended  September  30, 1996
increased 86.4% to  $216,944,000,  compared to $116,403,000  for the nine months
ended  September 30, 1995.  These benefits were derived from the  recognition of
net  operating  losses  which  can  be  utilized  against  future  deferred  tax
liabilities.

  Three Months Ended September 30, 1996 vs.Three Months Ended September 30, 1995

    Total revenues for the three months ended September 30, 1996 increased 78.3%
to $91,040,000, compared to $51,074,000 for the three months ended September 30,
1995. The increase  relates  primarily to an increase in radio service  revenues
offset by a $1,599,000 decrease in analog SMR equipment sales and revenues. Cost
of radio service revenue increased $16,657,000 or 43.8% while cost of analog SMR
equipment sales and maintenance  decreased $1,488,000 or 19.5%. The increases in
radio service revenue and cost of radio service revenue was principally a result
of an  increase  in analog SMR units in service  attributable  to the  completed
Acquisitions,  the  commencement  of Digital Mobile  network  service in certain
markets during 1996 and the increased  sales in markets that  commenced  Digital
Mobile network services in 1994 and 1995. The decrease in analog equipment sales
and  revenues  and the  related  cost of  equipment  sales  is a  result  of the
Company's continuing focus away from the sale of analog SMR radios and migration
of analog SMR customers to the Digital Mobile network  service in the markets in
which Digital Mobile networks have begun operating.

    Selling,  general and  administrative  expenses  for the three  months ended
September 30, 1996 increased 58.9% to  $83,985,000,  compared to $52,839,000 for
the  three  months  ended  September  30,  1995.  The  increase  related  to the
Acquisitions  and  increased  staffing  and  other  activities  to  support  the
implementation  and operation of the Digital Mobile networks.  Selling,  general
and administrative  expenses include a loss on Digital Mobile equipment sales of
$4,046,000 for the three months ended September 30, 1996,  compared to a loss of
$1,941,000 for the three months ended September 30, 1995,  reflecting,  in part,
the continued  effect of customer  subsidies or discounts on increased  sales of
Digital  Mobile units during the period ended  September  30, 1996.  The Company
anticipates  that it will continue to offer customers  subsidies or discounts in
connection  with the sale and  installation of Digital Mobile units as a part of
its overall Digital Mobile network service offering.

    Expenses related to the corporate  reorganization for the three months ended
September 30, 1995 were a result of the estimated  employee and facility related
costs resulting from the consolidation, resizing and relocation of the Company's
headquarters  and customer care operations in connection with the  Acquisitions.
No such costs were recorded during the three months ended September 30, 1996.

    Depreciation  and amortization for the three months ended September 30, 1996
increased  54.2% to  $105,869,000,  compared to $68,648,000 for the three months
ended  September 30, 1995,  reflecting  the effect of the  Acquisitions  and the
activation of additional Digital Mobile networks.

    Interest  income for the three months  ended  September  30, 1996  decreased
41.7% to $4,744,000, compared to $8,134,000 for the three months ended September
30, 1995, reflecting the utilization of cash and cash equivalents and marketable
securities  for the  development  and  implementation  of the Company's  Digital
Mobile  networks  and for  acquisitions.  Interest  expense for the three months
ended  September  30,  1996  increased   108.4%  to  $58,783,000,   compared  to
$28,203,000 for the three months ended September 30, 1995,  reflecting increased
interest expense  attributable to the OneComm Senior  Redeemable  Discount Notes
due 2004 and the Dial Call Senior  Redeemable  Discount  Notes due 2004 and 2005
assumed in the  Acquisitions  and  interest  expense  attributable  to increased
borrowings  under the Company's Bank Credit Facility and Vendor Credit Facility.
The  increase  in  interest  expense was also  attributable  to a  reduction  in
capitalized  interest  relating to  construction  in progress of Digital  Mobile
networks.  During  the three  months  ended  September  30,  1996,  the  Company
capitalized  interest  of  $10,031,000,  compared to  $10,155,000  for the three
months ended September 30, 1995.

                                      -17-

<PAGE>
    The  deferred  tax benefit for the three  months  ended  September  30, 1996
increased  26.1% to  $64,794,000,  compared to $51,375,000  for the three months
ended September 30, 1995. These benefits were derived from the generalization of
net  operating  losses  which  can  be  utilized  against  future  deferred  tax
liabilities.  The effective tax rate decreased from 33.5% to 30.3% for the three
months  ended  September  30,  1995 and  1996,  respectively,  as a result of an
adjustment  to  the  Company's  estimate  of  the  anticipated  1996  annualized
effective tax rate.

Liquidity and Capital Resources

    The Company had net losses of  $397,629,000  and  $331,165,000  for the nine
months  ended  September  30,  1996  and  the  year  ended  December  31,  1995,
respectively.  The costs of developing and operating the Digital Mobile networks
have offset the operating earnings of the analog SMR operations, including those
acquired  in the  Acquisitions,  and are  expected  to  continue  to offset such
operating earnings for the next several years. The Company has consistently used
external sources of funds, primarily from equity issuances and the incurrence of
debt, to fund operations,  acquisitions and capital  expenditures.  For the next
several years, the Company  anticipates using its existing cash and investments,
cash flow from analog SMR operations,  and externally  generated funds from debt
and equity  sources as discussed  below to cover  future  needs,  including  the
design, implementation and operation of the Digital Mobile networks.

    Working  capital as of September 30, 1996 increased  40.5% to  $196,260,000,
compared to  $139,652,000  at December 31, 1995. The increase in working capital
is primarily a result of the financing of accounts  payable due to Motorola (see
"Bank Credit Facility and Vendor Credit  Facility") offset by a decrease in cash
and cash  equivalents and marketable  securities.  Cash and cash equivalents and
marketable  securities decreased as a result of the utilization of cash and cash
equivalents  for the  development and  implementation  of the Company's  Digital
Mobile networks and for acquisitions.

    Bank Credit  Facility and Vendor Credit  Facility.  Effective  September 30,
1996,  Nextel,  NFC, and certain  subsidiaries  of Nextel  entered into the Bank
Credit Facility. Concurrently therewith, Nextel, NFC and certain subsidiaries of
Nextel  entered into the Vendor  Credit  Facility,  Which  superseded  the prior
financing  agreement  among Nextel,  certain of its  subsidiaries,  Motorola and
NTFC.

    The Bank  Credit  Facility  provides  for up to  $1,655,000,000  of  secured
financing,  consisting of a  $1,085,000,000  revolving loan and  $570,000,000 in
term loans.  The Vendor  Credit  Facility  provides  for up to  $345,000,000  of
secured financing,  consisting of a $195,000,000 revolving loan and $150,000,000
in term loans.  Borrowings  under the Bank Credit Facility and the Vendor Credit
Facility are ratably  secured by liens on assets of Nextel's  subsidiaries  that
are "restricted"  subsidiaries under the terms of Nextel's public indentures. As
of  September  30,  1996,  Nextel had drawn  approximately  $368,000,000  of its
available  financing  under the Bank Credit  Facility,  leaving an  aggregate of
approximately  $1,287,000,000  available for borrowing under such facility,  and
had drawn  $150,000,000  of its  available  financing  under the  Vendor  Credit
Facility,  leaving an  aggregate of  approximately  $195,000,000  available  for
borrowing  under  such  facility,  subject in each case to the  satisfaction  or
waiver of applicable  borrowing  conditions.  The proceeds from these borrowings
were used primarily to repay the outstanding  principal and accrued  interest on
the prior financing agreements with Motorola.

    Cash Flows. Net cash used in operating  activities for the nine months ended
September 30, 1996 was $313,655,000 compared to $111,257,000 for the nine months
ended  September  30,  1995.  This  increase is  primarily  attributable  to the
increase in costs related to the Acquisitions  and increased  staffing and other
activities to support the  implementation  and  operation of the Digital  Mobile
networks.  Net cash used in investing  activities was  $61,397,000  for the nine
months ended  September 30, 1996,  which includes a $46,211,000  use of cash for
capital expenditures primarily for the build out of the Digital Mobile networks,

                                      -18-
<PAGE>
offset largely by net cash obtained from acquisitions totaling $33,665,000,  and
a decrease in marketable securities of $64,452,000.  Financing activities during
the nine months ended  September 30, 1996  consisted  primarily of net long-term
borrowings of $61,636,000, as well as $99,905,000 of cash received in connection
with the exercise of the Comcast  anti-dilutive rights, offset by $37,336,000 of
cash  expenditures for debt issuance costs. As a result of the above activities,
cash and cash equivalents  decreased  $121,318,000  during the nine months ended
September 30, 1996.

Future Capital Needs and Resources

    Nextel  anticipates  that, for the foreseeable  future, it will be utilizing
significant  amounts of its  available  cash for  capital  expenditures  for the
construction of Digital Mobile networks (including conversion of existing "first
generation"  iDEN Digital Mobile  networks to the  Reconfigured  iDEN technology
platform), operating expenses relating both to Digital Mobile network and to the
Company's analog SMR systems,  potential acquisitions (including the acquisition
of rights to spectrum  through the contemplated 800 MHz spectrum auction process
and  investment  in  various  potential  international  wireless  communications
business opportunities) and other expenditures. Nextel anticipates that its cash
utilization  for  investment  activities  and operating  losses will continue to
exceed its cash flows from  operating  activities  over the next  several  years
during the  start-up  phase of its Digital  Mobile  networks and that it will be
necessary  for Nextel to utilize  its  existing  cash and funding  from  outside
sources to meet its cash needs resulting from such activities and losses.

    Nextel  believes  that  it  has  sufficient  funds  currently  available  or
reasonably  expected  to  be  accessible  to it  under  its  existing  financing
facilities  to meet its cash needs  through the planned  completion of its first
stage  nationwide  Digital  Mobile  networks  build-out in 1998, in light of its
current  (and  currently  committed)  business  and  investment  activities  and
assuming a conservative  ramp-up in Digital Mobile  network  subscriber  growth.
Nextel  currently  anticipates  that the funds  available  pursuant  to the Bank
Credit Facility and the Vendor Credit Facility,  together with the proceeds that
would be received by Nextel  assuming the exercise of the currently  outstanding
warrants and options to acquire  shares of Nextel common stock,  which  warrants
and options are scheduled to expire unless exercised during such time period and
are generally described in Nextel's prior public filings, would be sufficient to
permit both the planned implementation of its nationwide Digital Mobile networks
and the pursuit of its other strategic objectives, including additional spectrum
acquisition activities and international investment opportunities.  There can be
no  assurance,  however,  that such  outstanding  warrants  and options  will be
exercised.  Moreover, Nextel's public indentures contain provisions that operate
to limit the amount of borrowings  available  under the Bank Credit Facility and
the Vendor Credit Facility in certain circumstances.  In addition, the Company's
capital needs, and its ability to adequately  address those needs,  through debt
or equity  funding  sources,  are  subject to a variety of factors  that can not
presently  be  predicted  with  certainty,  such as the  commercial  success  of
Nextel's Digital Mobile networks incorporating the Reconfigured iDEN technology,
the  amount and  timing of the  Company's  capital  expenditures  and  operating
losses, and the market price of the Company's common stock. See "--Liquidity and
Capital   Resources--Bank  Credit  Facility  and  Vendor  Credit  Facility"  and
"--Forward-Looking Statements."

    For a more detailed  discussion of certain of the factors and considerations
that could have a material  effect on the timing and/or amount of future funding
required by the  Company,  see Part II,  Item 7,  "Management's  Discussion  and
Analysis of Financial Condition and Results of Operations--Future  Capital Needs
and Resources," in the Company's  Annual Report on Form 10-K for the fiscal year
ended December 31, 1995.

                                      -19-
<PAGE>
Forward-Looking Statements

    "Safe Harbor" Statements under the Private Securities  Litigation Reform Act
of 1995. A number of the matters and subject  areas  discussed in the  foregoing
Management's  Discussion  and  Analysis of  Financial  Condition  and Results of
Operations  (including  the  related  discussions  referred  to  above  that are
included in the Company's Annual Report on Form 10-K for the year ended December
31, 1995, as amended by Form 10-K/A filed with the  Commission on April 26, 1996
and  Form  10-K/A2  filed  with the  Commission  on May 17,  1996)  that are not
historical  or  current  facts  deal with  potential  future  circumstances  and
developments.  The  discussion of such matters and subject areas is qualified by
the inherent risks and uncertainties  surrounding future expectations generally,
and such  discussion  also may  materially  differ from  Nextel's  actual future
experience  involving any one or more of such matters and subject areas.  Nextel
has attempted to identify, in context,  certain of the factors that it currently
believes may cause actual future experiences and results to differ from Nextel's
current  expectations  regarding  the  relevant  matter  or  subject  area.  The
operation and results of Nextel's wireless  communications  business also may be
subject  to the  effect of other  risks and  uncertainties  in  addition  to the
relevant qualifying factors identified  elsewhere in the foregoing  Management's
Discussion  and  Analysis of  Financial  Condition  and  Results of  Operations,
including,  but not limited to,  general  economic  conditions in the geographic
areas and occupational market segments (such as construction, delivery, and real
estate  management  services)  that Nextel is targeting  for its Digital  Mobile
network   service,   the   availability   of  adequate   quantities   of  system
infrastructure and subscriber  equipment and components to meet Nextel's service
deployment and marketing  plans and customer  demand,  the success of efforts to
improve and address  satisfactorily  issues  relating to Digital  Mobile network
performance,   the  successful  development,   testing  and  deployment  of  the
Reconfigured iDEN technology in accordance with Nextel's currently  contemplated
nationwide  Digital Mobile network build-out plan, the ability to achieve market
penetration  and  average   subscriber  revenue  levels  sufficient  to  provide
financial viability to the Digital Mobile network business, access to sufficient
debt or equity  capital to meet  Nextel's  operating and  financial  needs,  the
quality  and price of similar or  comparable  wireless  communications  services
offered or to be offered by Nextel's  competitors,  including  cellular  and PCS
operators,  future  legislative or regulatory  actions relating to SMR services,
other wireless communications services or telecommunications generally and other
risks and  uncertainties  described from time to time in Nextel's  reports filed
with the Commission.

                                      -20-
<PAGE>

                                     Part II

Item 1. Legal Proceedings.

    The Company is  involved  in legal  proceedings  that are  described  in its
Annual  Report on Form 10-K for the year ended  December 31, 1995 (as amended by
Form 10-K/A filed with the  Commission  on April 26, 1996 and Form 10-K/A2 filed
with the  Commission  on May 17,  1996).  There were no material  changes in the
status of those proceedings during the three months ended September 30, 1996.

Item 6.  Exhibits and Reports on Form 8-K.

       (a)  List of Exhibits.

          Exhibit No.   Exhibit Description
             4.1     Registration   Agreement,   dated  as  of  August  23,
                     1996, by and among Nextel, Grupo Communicaciones, San Luis,
                     S.A. de C.V.  and each of the persons listed in Schedule 1
                     thereto (filed on October 23, 1996 as Exhibit  4.33 to
                     Amendment  No. 1 to the  Company's  Registration Statement
                     on Form S-3 No. 333-11733 and incorporated herein by
                     reference).
             10.1    Credit  Agreement  dated as of  September  27,  1996  among
                     Nextel,  NFC, the Restricted  Companies party thereto,  the
                     Lenders party  thereto,  Toronto-Dominion  (Texas) Inc., as
                     Administrative  Agent,  and The Chase  Manhattan  Bank,  as
                     Collateral  Agent (filed on October 1, 1996 as Exhibit 99.1
                     to the Company's Current Report on Form 8-K dated September
                     27,  1996 (the  "September  27 Form 8-K") and  incorporated
                     herein by reference).
             10.2    Amended,  Restated and Consolidated  Credit Agreement dated
                     as of September 27, 1996 among Nextel,  NFC, the Restricted
                     Companies  party  thereto  and the  Vendors  party  thereto
                     (filed on October 1, 1996 as Exhibit 99.2 to the  September
                     27 Form 8-K and incorporated herein by reference).
             27*     Financial Data Schedule.
          ----------------
          *      Submitted only with the electronic filing of this document with
                 the Commission  pursuant to Regulation S-T under the Securities
                 Act of 1933, as amended

       (b)  Reports on Form 8-K.

          (i) The  Company  filed a  Current  Report on Form 8-K dated and filed
              with the Commission on July 5, 1996 reporting under Item 5 thereof
              (i)  the  execution  of an  amendment  to the  existing  equipment
              purchase  agreements  between the Company  and  Motorola;  (ii) an
              agreement in principle between the Company and Motorola  regarding
              certain  basic  financing  terms  associated  with  the  Company's
              nationwide  deployment of its Digital Mobile  networks;  and (iii)
              the Company's  placement of an order of more than $100,000,000 for
              Motorola's infrastructure equipment and handsets.

          (ii)    The Company  filed a Current  Report on Form 8-K dated and
              filed with the  Commission on August 30, 1996  reporting  under
              Item 5 thereof the execution of a commitment  letter and term
              sheet dated August 16, 1996 between the Company, Chase Securities
              Inc., J.P. Morgan Securities Inc. and Toronto-Dominion Securities
              (USA), Inc. regarding the terms of a proposed secured credit
              facility.

                                      -21-
<PAGE>


                                     SIGNATURE

    Pursuant to the  requirements  of the  Securities  Exchange Act of 1934, the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.


                                          NEXTEL COMMUNICATIONS, INC.


                                          By: /s/STEVEN M. SHINDLER
Date:  November 12, 1996                      Steven M. Shindler
                                              Senior Vice President
                                              and Chief Financial Officer



                                      -22-

<PAGE>

                                  EXHIBIT INDEX


Exhibit No.          Exhibit Description
   4.1      Registration  Agreement,  dated as of August 23, 1996, by and among
            Nextel,  Grupo  Communicaciones, San Luis, S.A. de C.V. and each of
            the persons listed in Schedule 1 thereto (filed on October 23, 1996
            as Exhibit 4.33 to Amendment No. 1 to the  Company's  Registration
            Statement on Form S-3 No. 333-11733 and incorporated herein by
            reference).
   10.1     Credit  Agreement dated as of September 27, 1996 among Nextel,  NFC,
            the Restricted  Companies party thereto,  the Lenders party thereto,
            Toronto-Dominion  (Texas) Inc.,  as  Administrative  Agent,  and The
            Chase Manhattan Bank, as Collateral  Agent (filed on October 1, 1996
            as Exhibit 99.1 to the  Company's  Current  Report on Form 8-K dated
            September 27, 1996 (the  "September  27 Form 8-K") and  incorporated
            herein by reference).
   10.2     Amended,  Restated and  Consolidated  Credit  Agreement  dated as of
            September 27, 1996 among Nextel, NFC, the Restricted Companies party
            thereto and the Vendors party  thereto  (filed on October 1, 1996 as
            Exhibit 99.2 to the September 27 Form 8-K and incorporated herein by
            reference).
   27*      Financial Data Schedule.
----------------
*      Submitted  only  with the  electronic  filing of this  document  with the
       Commission  pursuant to Regulation  S-T under the Securities Act of 1933,
       as amended;



                                      -i-