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Technology Stocks : NEXTEL

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To: Arnie Doolittle who wrote (9050)	4/14/1999 2:42:00 AM
From: SteveG	of 10227

Motorola Updates Status On New iDEN Products Bankers Trust Research/BT Alex. Brown Research Jeffrey Hines,Bo Fifer April 13, 1999 --------------------------------------------------------------------------- ---- NEXTEL COMMUNICATIONS INC. [NXTL] "STRONG BUY" CLEARNET COMMUNICATIONS INC. [CLNTF] "STRONG BUY" Motorola Updates Status On New iDEN Products --------------------------------------------------------------------------- ---- 52-WK Earnings Per Share FY Price Price 3-5 Yr Est. Ticker End 04/13/1999 Range 1998 1999 2000 Growth Chg? NXTL 12 36.00 43-15 (6.46)A (4.57) (2.91) N CLNTF 12 13.13 19-6 (10.93)A (9.44) (7.71) N --------------------------------------------------------------------------- ---- HIGHLIGHTS: -- Motorola reported 1Q 1999 results Tuesday (13-Apr.) after the market close. -- In their release, Motorola confirmed two important developments regarding the iDEN digital wireless technology being used by Nextel, Clearnet, et. al. 1. Confirmed that the i2000 phone product will begin shipping in 3Q 1999. This phone is the so-called "World-Phone" which will operate on both iDEN and GSM networks and thus allow Nextel and Clearnet's MiKe service to offer "world" roaming services to their customers, thereby leveraging their business focus/advantage even further in the market. 2. Confirmed that the i1000 plus product will begin shipping in 2Q 1999. This phone is the so-called "Internet" capable phone which comes with web browser built into the phone. Expect Nextel/Clearnet to be the first carriers in US/Canada to roll-out Internet based wireless data services in a significant way. Nextel has already confirmed roll-out in 6 cities of "Nextel Online" in 2H 1999 with national roll-out expected 1Q 2000. Clearnet expected to confirm similar dates shortly. Not currently built into models (i.e., possible source of upside). -- STOCK PRICE PERFORMANCE: NXTL is up 52% YTD, behind our PCS Index (up 63%) but ahead of the S&P500 (up 10%). CLNTF is up 62% YTD. Toronto 300 is up 7%. -- VALUATION: Reiterate "strong buy" ratings on NXTL and CLNTF with 12- month price objectives (based on our DCF) of $44/share and $28/share respectively. Our underlying price objective on NXTL is $48/share based on our discounted cash flow. Current 12-month price target of $44/share heavily discounts non-fully funded Nextel International operations. Despite strong YTD performance we believe that CLNTF remains one of the cheapest stocks in our universe. Stay tuned.

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