1A.) Consider the data in Exhibit 1. What does it say about the competitive position of Nextel in the marketplace relative to its competitors? Explain.

1B.) Nextel has no choice but to sell some of its South American subsidiaries. Agree or disagree. Why?

1C.) Is Nextel Peru likely to be better off if it is acquired by Entel? Discuss.

Exhibit1Comparable Latin American Wireless Companies Local Currency in Millions) MSCI MSC World S&P Latin Local Debt Beta Net Minority Enterprise Curren Historic Equity Eqty Equity Equity bt Interest America Movil Embratel Participacoes S.A Empresa Nacional De Telecomunicaciones NII Holdings Oi SA Telecom Telefonica Brasil Telefonica Del Peru TIM Participacoes S.A. 963,882 13,173 2,356,959 363,978 8,990 1,336,850 4,842 27.23% 11.05% 17.73% 25.18% 20,252 0.53 0.83 0.63 385,754 0 2,742,713 14.06% 13.74% 0.81 80.01% 74.02% 0.77 1.14 0.15 10,152 24,167 59,983 7,833 39,073 32.48% 13.91 % 3.28% 26 57% 6.78% (3,969) 60,957 10,045 1.58 0.24 0.74 22.03% 0.38 0.82 Source All information except equity betas S&PCapital IQ, accessed 3/14/14. 1 Stock prices as of 4/1/13, except NII Holdings, which was 4/5/13, 2Quarterly average over the past three years. Source: Bloomberg, accessed 3/14/14. Raw three year monthly betas. Source: Bloomberg, accessed 3/14/14. Raw three year monthly betas based on US. dollar denominated retums. Source: Bloomberg, accessed 3/14/14. Raw three year monthly betas based on US. dollar denominated returms. Source: Bloomberg, accessed 3/14/14. Raw three year monthly betas based on local currencies. Case writer estimates Local Currency in Millions) Last 12 Months: 5 Year Avera Revenue Growth 13.0% 45.0% 14.8% EBIAT Margin Margin Margin 21.8% EBIT EBITDA FCF Revenue EBIT EBITDA EBIAT MarginGrowth2 17.2% 10.4% in 10.6% -1 1.0% 3,0% 12.0% America Movil Embratel Participacoes S.A Empresa Nacional De Telecomunicaciones NII Holdings OiSA Telecom Argentina Telefonica Brasil Telefonica Del Peru TIM Participacoes S.A Average Median 14.4% 10.3% 8.6% 33.0% 11 .5% 1.3% 14.5% 21.6% 14,0% 22.2% 20.8% 21.4% 19.2% 0.9% 18.6% 14.2% 30,1% 3.0% 15.9% 13.5% 15.0% 10.9% 165.1% 18.3% 20.5% 30.5% 20.2% 19.3% 35.9% 12.8% 11.3% 19.2% 12.8% 16.9% 4.2% 9.5% 4.6% 28.7% 1 3.0% 12.5% 14.2% 17.2% 30.1% 30.5% Source Data from S&P Capital 1Q, accessed 2/27/13. EBIAT-EBIT -t) using the effective tax rate. 5 year revenue growth is on a compound annual basis Exhibit1Comparable Latin American Wireless Companies Local Currency in Millions) MSCI MSC World S&P Latin Local Debt Beta Net Minority Enterprise Curren Historic Equity Eqty Equity Equity bt Interest America Movil Embratel Participacoes S.A Empresa Nacional De Telecomunicaciones NII Holdings Oi SA Telecom Telefonica Brasil Telefonica Del Peru TIM Participacoes S.A. 963,882 13,173 2,356,959 363,978 8,990 1,336,850 4,842 27.23% 11.05% 17.73% 25.18% 20,252 0.53 0.83 0.63 385,754 0 2,742,713 14.06% 13.74% 0.81 80.01% 74.02% 0.77 1.14 0.15 10,152 24,167 59,983 7,833 39,073 32.48% 13.91 % 3.28% 26 57% 6.78% (3,969) 60,957 10,045 1.58 0.24 0.74 22.03% 0.38 0.82 Source All information except equity betas S&PCapital IQ, accessed 3/14/14. 1 Stock prices as of 4/1/13, except NII Holdings, which was 4/5/13, 2Quarterly average over the past three years. Source: Bloomberg, accessed 3/14/14. Raw three year monthly betas. Source: Bloomberg, accessed 3/14/14. Raw three year monthly betas based on US. dollar denominated retums. Source: Bloomberg, accessed 3/14/14. Raw three year monthly betas based on US. dollar denominated returms. Source: Bloomberg, accessed 3/14/14. Raw three year monthly betas based on local currencies. Case writer estimates Local Currency in Millions) Last 12 Months: 5 Year Avera Revenue Growth 13.0% 45.0% 14.8% EBIAT Margin Margin Margin 21.8% EBIT EBITDA FCF Revenue EBIT EBITDA EBIAT MarginGrowth2 17.2% 10.4% in 10.6% -1 1.0% 3,0% 12.0% America Movil Embratel Participacoes S.A Empresa Nacional De Telecomunicaciones NII Holdings OiSA Telecom Argentina Telefonica Brasil Telefonica Del Peru TIM Participacoes S.A Average Median 14.4% 10.3% 8.6% 33.0% 11 .5% 1.3% 14.5% 21.6% 14,0% 22.2% 20.8% 21.4% 19.2% 0.9% 18.6% 14.2% 30,1% 3.0% 15.9% 13.5% 15.0% 10.9% 165.1% 18.3% 20.5% 30.5% 20.2% 19.3% 35.9% 12.8% 11.3% 19.2% 12.8% 16.9% 4.2% 9.5% 4.6% 28.7% 1 3.0% 12.5% 14.2% 17.2% 30.1% 30.5% Source Data from S&P Capital 1Q, accessed 2/27/13. EBIAT-EBIT -t) using the effective tax rate. 5 year revenue growth is on a compound annual basis