1. Forecast the expected cash flow for Nextel Peru for the next year (2013). Make sure to use free cash flow (FCF) rather than net income or other measures. 2. Nextel Peru is considered to be a mature company and therefore its future cash flows are expected to grow at a relatively low rate forever. Estimate this growth rate. 3. Decide on a model for the cost of capital. Pay attention to the the locale and the portfolio of the investor and the locale of Nextel Peru. Estimate the risk(s) and the risk premium(s). Calculate the cost of capital. 4. Determine the value of Nextel Peru. Based on this value, conclude whether to pay $400 million for Nextel Peru or not. 5. Projected growth rate in the expected cash flows, the model for cost of capital, the risk-free rate, the value(s) of measure(s) of risk and the value(s) of the risk premium(s), do some sensitivity analysis to determine the scenarios in which paying $400 million for Nextel Peru would be a good idea, and scenarios in which it wont be.

			Last 12 Months:					5 Year Average:
			Revenue	EBIT	EBITDA	EBIAT	FCF	Revenue	EBIT	EBITDA	EBIAT	FCF
Companies:			Growth	Margin	Margin	Margin (1)	Margin	Growth (2)	Margin	Margin	Margin (1)	Margin
America Movil			13.0%	19.7%	33.0%	21.8%	10.6%	19.1%	12.0%	14.4%	10.3%	11.1%
Embratel Participacoes S.A.			45.0%	11.5%	26.9%	5.9%	-11.0%	17.2%	12.1%	13.1%	8.6%	1.3%
Empresa Nacional De Telecomunicaciones			14.8%	17.4%	38.4%	14.5%	3.0%	8.1%	21.6%	42.7%	18.2%	5.6%
NII Holdings			-11.7%	0.9%	14.2%	NM	-6.7%	10.4%	14.0%	24.2%	9.1%	3.0%
Oi SA			165.1%	18.6%	30.1%	12.3%	2.4%	20.5%	22.2%	33.9%	15.9%	16.0%
Telecom Argentina			18.3%	18.3%	26.3%	11.9%	8.5%	19.4%	20.8%	30.5%	13.5%	12.1%
Telefonica Brasil			2.1%	20.2%	35.9%	12.8%	19.2%	18.1%	21.4%	36.9%	15.0%	16.9%
Telefonica Del Peru			5.3%	19.3%	34.7%	11.3%	12.8%	6.3%	19.2%	39.7%	10.9%	15.7%
TIM Participacoes S.A.			6.8%	13.8%	28.0%	9.5%	2.3%	8.6%	8.6%	26.6%	5.2%	4.2%
Average			28.7%	15.5%	29.7%	12.5%	4.6%	14.2%	16.9%	29.1%	11.9%	9.5%
Median			13.0%	18.3%	30.1%	12.1%	3.0%	17.2%	19.2%	30.5%	10.9%	11.1%

Operating Results:							2010	2011	2012
Service Revenue							5,348,400	6,403,519	5,779,159
Plus: Handset & Accessory Revenue							257,407	331,427	307,304
Total Operating Revenue							5,605,807	6,734,946	6,086,463
Less: Cost of Service (Excluding Depreciation & Amortization)							1,504,603	1,789,402	1,690,464
Less: Cost of Handset Sales							719,219	855,929	915,120
Gross Profit							3,381,985	4,089,615	3,480,879
Less: Selling & Marketing (1)							1,946,706	2,504,976	2,875,359
EBITDA							1,435,279	1,584,639	605,520
Less: Depreciation & Amortization							554,886	653,087	728,780
Operating Income							880,393	931,552	-123,260
Less: Interest Expense							344,999	322,111	373,253
Plus: Interest Income							28,841	34,224	34,143
Plus: Foreign Currency Gains							52,374	-36,975	-53,415
Less: Other Expenses							18,686	37,305	27,355
Earnings Before Taxes							597,923	569,385	-543,140
Less: Taxes							259,465	344,189	222,109
Net Income							338,458	225,196	-765,249

Assets:							2010	2011	2012
Cash & Cash Equivalents							1,767,501	2,322,919	1,383,491
Plus: Short-Term Investments							537,539	343,422	204,834
Plus: Net Accounts Receivable							788,000	858,471	705,737
Plus: Handset Inventory							227,191	277,291	349,704
Plus: Deferred Taxes							186,988	203,012	175,753
Plus: Prepaid Expenses & Other Current Assets							393,658	331,407	515,513
Total Current Assets							3,900,877	4,336,522	3,335,032
Net Property, Plant & Equipment							2,960,046	3,481,869	3,884,947
Plus: Net Intangible Assets							433,208	1,182,380	1,164,672
Plus: Deferred Taxes							486,098	410,162	367,182
Plus: Other Assets							410,458	411,203	471,245
Total Assets							8,190,687	9,822,136	9,223,078
Liabilities & Owners' Equity:
Accounts Payable							300,030	377,679	485,542
Plus: Accrued & Other Expenses							827,253	1,008,932	1,015,788
Plus: Deferred Revenue							158,690	159,150	161,451
Plus: Current Portion of Long-Term Debt							446,995	573,465	97,244
Total Curent Liabilities							1,732,968	2,119,226	1,760,025
Long-Term Debt							2,818,423	4,244,752	4,768,958
Plus: Deferred Revenue							20,476	15,585	14,007
Plus: Deferred Tax Liabilities							88,068	61,156	58,189
Plus: Other Long-Term Liabilities							211,179	243,335	305,450
Total Liabilities							4,871,114	6,684,054	6,906,629
Total Stockholders' Equity							3,319,573	3,138,082	2,316,449
Total Liabilities & Stockholders' Equity							8,190,687	9,822,136	9,223,078

Operating Results:							2010	2011	2012
Service Revenue							5,066,404	6,081,577	5,465,120
Plus: Handset & Accessory Revenue							227,387	299,240	278,002
Total Operating Revenue							5,293,791	6,380,817	5,743,122
Less: Cost of Service (Excluding Depreciation & Amortization)							1,404,555	1,681,692	1,574,327
Less: Cost of Handset Sales							656,409	784,072	829,859
Gross Profit							3,232,827	3,915,053	3,338,936
Less: Selling & Marketing (1)							1,813,607	2,360,303	2,714,770
EBITDA							1,419,220	1,554,750	624,166
Less: Depreciation & Amortization							502,203	588,164	649,545
Operating Income							917,017	966,586	-25,379
Less: Interest Expense							335,918	311,735	365,521
Plus: Interest Income							28,334	34,096	33,862
Plus: Foreign Currency Gains							52,412	-37,297	-53,957
Less: Other Expenses							18,686	37,750	28,340
Earnings Before Taxes							643,159	613,900	-439,335
Less: Taxes							269,869	351,204	158,141
Net Income							373,290	262,696	-597,476

Historical Operating Results			($ 000's)
Operating Results (1):							2010	2011	2012
Service Revenue							281,995	321,942	314,039
Plus: Handset Revenue							30,021	32,187	29,302
Total Operating Revenue							312,016	354,129	343,341
Less: Cost of Services (2)							100,048	107,710	116,137
Less: Cost of Handset Sales							62,810	71,857	85,261
Gross Profit							149,158	174,562	141,943
Less: Selling & Marketing Expenses (3)							55,783	63,575	72,375
Less: General & Administrative Expenses							71,112	75,672	83,549
Segment EBITDA							22,263	35,315	-13,981
Estimated Depreciation (4)							34,137	35,858	35,088
Total Assets							556,752	597,891	498,230
Capital Expenditures							94,000	105,500	77,700
Net Reinvestment in Long-Term Assets							59,863	69,642	42,612
Margins:
Service Revenue Growth							16.9%	14.2%	-2.5%
Handset Revenue Growth							10.8%	7.2%	-9.0%
Growth in Operating Revenue							16.3%	13.5%	-3.0%
Gross Profit on Services							64.5%	66.5%	63.0%
Gross Profit on Handsets							-109.2%	-123.2%	-191.0%
Total Gross Profit							47.8%	49.3%	41.3%
EBITDA Margin							7.1%	10.0%	-4.1%
EBIT Margin							-3.8%	-0.2%	-14.3%

NII Holdings Subscriber Data:							2010	2011	2012
Total Handsets in Use							9,027	10,712	11,362
Net Sbscriber Increase							1,685	650	629
Estimated Average Subscribers							8,816	10,491	11,121
Growth in Subscribers							21.0%	19.0%	6.0%
ARPU (1)							607	610	520
Nextel Peru Subscriber Data:
Total Handsets in Use							1,128	1,435	1,660
Net Sbscriber Increase							286	307	225
Estimated Average Subscribers							985	1,282	1,548
Growth in Subscribers							34.0%	27.2%	15.7%
ARPU (1)							286	251	203

	Monthly Stock Market Returns:
				MSCI
				Global
Date:	Peru	Chile	S&P	Index

01/31/2012	12.71%	7.37%	4.52%	5.02%
02/29/2012	3.56%	7.93%	4.33%	4.88%
03/31/2012	3.89%	1.27%	3.29%	1.29%
04/30/2012	-3.96%	-0.55%	-0.60%	-1.14%
05/31/2012	-7.41%	-10.94%	-5.98%	-8.63%
06/30/2012	-3.76%	4.56%	4.15%	5.10%
07/31/2012	-2.74%	0.62%	1.44%	1.29%
08/31/2012	3.35%	-0.82%	2.27%	2.54%
09/30/2012	6.71%	3.06%	2.51%	2.75%
10/31/2012	-4.08%	0.38%	-1.78%	-0.68%
11/30/2012	-3.58%	-2.77%	0.52%	1.28%
12/31/2012	2.92%	4.14%	0.82%	1.88%
01/31/2013	3.91%	6.88%	5.22%	5.09%
02/28/2013	-3.84%	-0.17%	1.32%	0.17%
03/31/2013	-3.65%	-2.04%	3.75%	2.34%

Daily Yields:
	Peruvian	US
	30-Yr	30-Yr
Date:	Rate	Rate

2/15/13	4.88%	3.18%
2/18/13	4.88%	3.20%
2/19/13	4.88%	3.21%
2/20/13	4.88%	3.20%
2/21/13	4.92%	3.17%
2/22/13	4.92%	3.15%
2/25/13	4.97%	3.08%
2/26/13	5.06%	3.08%
2/27/13	5.00%	3.11%
2/28/13	4.99%	3.10%
3/1/13	4.99%	3.06%
3/4/13	5.00%	3.08%
3/5/13	5.01%	3.10%
3/6/13	5.03%	3.15%
3/7/13	5.04%	3.20%
3/8/13	5.10%	3.25%
3/11/13	5.16%	3.26%
3/12/13	5.10%	3.22%
3/13/13	5.10%	3.22%
3/14/13	5.08%	3.25%
3/15/13	5.02%	3.22%
3/18/13	5.03%	3.18%
3/19/13	5.05%	3.13%
3/20/13	5.07%	3.19%
3/21/13	5.07%	3.15%
3/22/13	5.07%	3.13%
3/25/13	5.06%	3.14%
3/26/13	5.06%	3.13%
3/27/13	5.06%	3.09%
3/28/13	5.06%	3.10%
3/29/13	5.06%	3.09%
4/1/13	5.05%	3.08%