Subject: [NEXTEL-1] Note: Friedman, Billings, Ramsey & Co., Inc. Dowgrades Nexthell

From: [email-masked]
Date: Fri, 21 May 2004 13:50:47 -0400

Note: Friedman, Billings, Ramsey & Co., Inc. Dowgrades Nexthell
21 May 2004, 09:50am ET

NXTL: Downgrading To Market Perform - According to sources, FCC
commissioners may be leaning toward offering
NXTL spectrum in the 2.1 GHz, rather than 1.9 GHz, range. This decision
could deal a blow to NXTL as it attempts to
leverage its public-safety band spectrum (800 MHz) for a new range of
frequencies adjacent to the personal communications systems band (1.9
GHz). NXTL wants the FCC to allocate 10 MHz of bandwidth in the 1.9 GHz
range as part of a resolution to interference problems in the 800 MHz
band that it currently occupies along with law enforcement. NXTL has
said it will rebuff a 2.1 GHz offer from the FCC, but many investors
believe NXTL is holding out for a low price for the spectrum.
By applying a multiple of 6.9x to our 2005 EBITDA estimate of $5.4B, we
arrive at our $26 price target. At the new target, we believe NXTL will
trade below the peer group average EV/2005 EBITDA of 7.0x, which
assumes, next year, the group expands to the 2004 average multiple from
its current 6.1x average.

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