Subject: [NEXTEL-1] Q&A with Tom Kelly From Nextel

From: Marcel <[email-masked]>
Date: Tue, 19 Nov 2002 14:12:56 -0500

11/19/2002

Q &A With Nextel's Tom Kelly-

Tom Kelly: Good afternoon. My name is Tom Kelly, EVP and Chief Marketing
Officer of Nextel Communications. Thank you for joining us this afternoon. For
those of you who don't know, Nextel is a wireless communications company that
targets business users with the nation's only differentiated wireless service
included our Direct Connect Push-to-talk walkie/talkie product and a national
wireless data network. We have been very successful acquiring and retaining the
most valuable wireless customers. Let's get started!

Jim DiNapoli, Meriden,CT: Will the launch of National Direct Connect be on time
and will it be a buy-up option? I am very anxious for this to happen.
Tom Kelly: This is the most asked question we get. We're excited to say that we
will begin launching National Direct Connect in early 2003 and it will nationally
available in third Quarter.

Kris - Santa Clarita, California: 1) When will Nextel Direct Connect be nationwide?
2) When will Nextel have a camera-phone?
Tom Kelly: Since I just answered the first question, I'll go to your second one.
Our future nextel handset platforms will include a camera option.

Gary, Ohio: Tom, your direct connect is great why switch to a cdma bases Q-chat?
Tom Kelly: You are right, Direct Connect is a terrific product. We have not made
any final decisions on the timing of next platform or selection of new technology
platforms. We are working with Motorola and Qualcomm on developing future
new and enhanced Direct Connect Services.

Larry, Cincinnati: Tom: which direction is Nextel going in 3G, or are you staying
away since internet doesnt seem to be taking off ?
Tom Kelly: Today, we bwlieve our current iDEN 2.5G network is delivering all the
features and functioinality required to serve the voice and wireless data needs of
our customers. We have and continue to analyse every available technology to
understand how they compare. We already have made the decision with Motorola
to basically double the voice capacity of our current network and will have that in
place before the end of 2003. This gives us the flexibility to be sure we've seen
all the options before making any final decision. It also gives us the opportunity
to ensure there is a real market for the new features and functionality the new
technologies are suppose to bring.

Mike - NY, NY: Hi Tom - I have two questions for you. First, do you have any
thoughts on 802.11b and how it may factor into Nextel's plans? Second, are you
hiring?

Tom Kelly: We do see 802.11 as a compliment to our broader network wireless
data offering. However, we view it more broadly than 802.11b and include version
"a" with broader bandwidth. We have invested in company with whom we are
developing in-building infrastructure that will combine both 802.11 with our
current voice and data services. We do have positions available and are always
looking for talented people. You can send your resume directly to Nextel.com.

Jennifer Fruehauf, Toronto, Canada: In your view, what will it take to drive
consumer mobile data services to the mass market?

Tom Kelly: Our focus has been on developing applications that are focused on
the business market vs consumer. In today's market, businesses have real
needs that are performance and value driven and we believe that is where our
focus should continue to be. Today over 20% of our total subscribers are on data
plans which I believe is the highest wireless data penetration of all carriers. We
will also be launching the Nextel Blackberry in December which will provide yet
another device for our business users. It will contain all our current voice and
data capabilities as well as provide the unique features of the Blackberry device.

Scott, Chicago, IL: Can you comment (even vaguely) on the direction Nextel
wants to take technologically, since all other carriers talk about 2.5G, 3G, EDGE,
GPRS, UMTS, and so forth, where is Nextel going?

Tom Kelly: Yes. Based on the market we serve, we are competitively advantaged
with our current iDEN technology which is a 2.5G network. The real value of rolling
out most of the new technologies by other carriers has been to increase voice
capacity. We can do that with iDEN as we basically double our voice capacity by
end of 2003. There is not clear evidence that the market is ready to pay for the
new data services and speeds the new technologies promise. By waiting, we are
in a position to learn from our competitors' actions, continue to review both 3G
and 4G technologies and make our choice when we are confident the ROI will be
there.

Clint, Boston, MA: Hi Tom, can you describe what any direct efforts by Nextel that
may be underway to go after the youth market?

Tom Kelly: We are currently testing a new service targeted to the youth market,
primarily ages 14 to 22. It is in test in the California and Nevada market and is
offered under the Boost brand name. The focus is on using Nextel's key point of
difference, our digital 2-way radio feature, to help kids communicated fast and
easy - think of it as instant voice messaging. The test market was launched in
mid September and we are pleased with the results so far but it is much too early
to draw any conclusions. We'll keep you posted.

Tony, Los Angeles, CA: Enjoy both using and SELLING Nextel. Will Nextel
continue to enhance back office operatrions(cust svc, billing, etc)?

Tom Kelly: Yes. We currently rolled out a new billing platform this year and will
use that as a basis for improving both the internal processess that support sales
and care as well as provide more billing options and flexibility for our customers.

Brent from Mesa, AZ: Are you concerned about other cariers coming after the
push to talk customers, with a comparable product?

Tom Kelly: We have always expected our competition to develop competitive
products. Given our success, why wouldn't they try. It's not a simple task as
evidenced by several of our competitors having promised these products for
some time. We welcome the challenge as we will continue to improve and
expand the features and functionality of Direct Connect. And don't forget, Direct
Connect is only one way in which we continue to differentiate Nextel in the
market.

Laura, Arlington, VA: What's Nextel's secret? How is the company doing so well
when its competitors aren't?

Tom Kelly: There is no secret. We have built a sound business strategy that
follow with discipline and continue to revise as necessary. Our strategy dictates a
balanced focus on driving both the top and bottom lines. Net result is we have
continued to deliver subscriber growth and record breaking cash flow and
excellent operating margins all at the same time.

Jerry, Houston, TX: I heard that when Nextel upgrades it's network to 3G, it will
lose the 2-way radio feature. Is this true?

Tom Kelly: NO. Any move to any new technology will include interoperability
between our current and new network.

Scott, Chicago, IL: I heard Nextel is about to roll out DirectConnect between
subscribers in different cities? Do you see the DirectConnect feature as enough to
differentiate Nextel from competitors in the future, especially as regular voice
minutes become cheaper and cheaper?

Tom Kelly: Nextel is currently rolling out a Direct Connect service that will allow
users from one city, for example Chicago, to travel to another city, say LA, and
be able to Direct Connect each other and all other Direct Connect users in LA.
This will be followed by the rollout of National Direct Connect which will begin eary
2003 and be complete in third quarter of 2003. Direct Connect is only one service
with which we differentiate ourselves in the market. And, we believe, and our
performance shows, business customers demand more than cheap minutes.

Art Rosenberg, Santa Monica, CA: Tom, Once the wireless network becomes
digital, who will ultimately control the choice of user interfaces for personal
multi-modal communications? The carriers? The device manfacturers? The device
operating system providers? Bill Gates?

Tom Kelly: Most of the new technologies are digital. Nextel is 100% digital and
has been since we began offering service.

Will in Walnut Creek, CA: How do your Java apps relate/compare to functions of
a Palm or Pocket PC? What kind of apps are you looking at adding?

Tom Kelly: The great advantage of Java is that you have thousands of
developers from which customers can utilize applications. The language also
allows for simple, cost effective development of custom apps to meet specific
customer requirements. This can be done independent of a single operating
system like Palm or Pocket PC and be downloaded right over the network. We
are always looking for business apps given our target market and generally work
with the companies that represent our customers needs.

Angela, New York: Will the new Nextel/Blackberry, coming in December, offer
voice/data coverage on a national basis? And, will direct connect be offered on
the RIM as well?

Tom Kelly: Yes. The Nextel/Blackberry will operate anywhere on Nextel's national
network and will include all the voice and data services we offer today including
Direct Connect. It's really a great product and you will love it!

Wally O, Columbus, OH: How does Nextel plan on combatting the other carriers
service plans that include nationwide mobile to mobile calling in a true phone
format versus Nextel's 2-way radio format.

Tom Kelly: Carriers have had mobile to mobile plans for years. However, mobile
to mobile is pricing scheme not a technology or a service. Also a "true phone
format" does not meet our customers' need for instant communications with
connection times in milliseconds, does not provide the group call capabilites
unless they set up a conference call and ..... you still have to contend with voice
mail which is a pain for most business users.

Michael Simpson: When will we see streaming video on a Nextel phone? How far
off into the future is such an application?

Tom Kelly: This is not a Nextel question but an industry question. The cost of
delivering streaming video has to be aligned with what customers are willing to
pay. Little evidence that willingness to pay is there today.

Patrick McLean, VA: How will your "wait and see" approach position you financially
and technically for an eventual 3G upgrade? How significant will your sunk cost
2.5G investments be?

Tom Kelly: It will position us perfectly as we will have the advantage of picking
the best technology at the best price when the market is ready. There are no
"sunk cost" in a network that is serving over 10 million subscribers with the
highest value in the industry and will have a life that will extend and compliment
any new technology we chose. Nextel has been publicly praised for our
technology approach.

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