WIRELESS AND MOBILE NEWS

• Wireless profitability declines; increased contribution from Wireline
• Growth in Wireless data and Internet services offset by lower voice revenues
• Full-year revenues of $40.1 billion, free cash flow* of $2.2 billion
• Goodwill impairment charge of $29.7 billion recorded in fourth quarter
• Company takes actions to increase financial flexibility

Segment Results

Wireline

• Fourth quarter revenues were $1.6 billion, a modest sequential increase and a decline of 1% compared to the fourth quarter of 2006. Internet Protocol (IP) revenues increased 11% sequentially and 42% on an annual basis. Full-year 2007 revenues were $6.5 billion compared to $6.6 billion in 2006.
• Adjusted Operating Income* in the fourth quarter was $178 million compared to $158 million in the third quarter and $116 million in the fourth quarter of 2006. Profitability in the quarter partially benefited from a patent licensing agreement.
• Fourth quarter Adjusted OIBDA* of $320 million compares with $290 million in the third quarter and $263 million in the same period a year ago. Adjusted OIBDA* exceeded capital expenditures by more than $100 million for the quarter and more than $400 million for the full year.

OVERLAND PARK, Kan.--(BUSINESS WIRE)--Feb. 28, 2008--Sprint Nextel Corp. (NYSE: S) today reported fourth quarter and full-year 2007 financial results. Consolidated net operating revenues in the quarter were $9.8 billion, compared to $10.4 billion in the fourth quarter of 2006. Full-year 2007 revenues were $40.1 billion versus $41.0 billion in 2006. In the quarter, the company recorded a non-cash goodwill impairment charge of $29.7 billion. The net loss for the quarter was $29.5 billion or $10.36 diluted loss per share compared to net income of $261 million or 9 cents diluted earnings per share in the fourth quarter a year ago.

After adjusting for the goodwill impairment charge, as well as the effects of other special items and merger-related amortization costs, Adjusted EPS before Amortization* was 21 cents in the fourth quarter of 2007, compared to 29 cents in the fourth quarter of 2006. The decline in earnings is due to a reduced contribution from Wireless, partially offset by an improved contribution from Wireline, an investment gain and an income tax benefit in the fourth quarter of 2007.

As previously reported, wireless subscribers declined 108,000 in the fourth quarter, due to gains in wholesale and Boost Unlimited subscribers offset by decreases in iDEN post-paid and traditional Boost pre-paid users. For the quarter, post-paid churn was 2.3%, matching the third quarter of 2007 and the fourth quarter of 2006. Wireless post-paid ARPU in the quarter was a little more than $58, a 1% sequential decline and a 4% decrease compared to the fourth quarter of 2006. ARPU continues to be pressured by lower voice contributions, partially offset by growth in data services.

"The fourth quarter financial results reflect the challenges facing our Wireless business," said Dan Hesse, Sprint Nextel CEO. "We are making significant changes across the organization in an effort to improve execution, stabilize our customer base and deliver on the opportunity provided by our assets. Given current deteriorating business conditions, which are more difficult than what I had expected to encounter, these changes will take time to produce improved operating performance, and our near-term subscriber and financial results will continue to be pressured. Additionally, in light of current capital market conditions, we are taking steps to increase our financial flexibility and mitigate refinancing risk by borrowing funds from a revolving credit facility and discontinuing declaring a dividend for the foreseeable future.

"Internally, we have rolled out a unified company culture focused on accountability and on providing a superior customer experience. We plan to share some of our initiatives for improving the customer experience and operations next quarter. Strategic assessments and changes may take longer to complete," Hesse said.

C

The following is a discussion of consolidated results:

• Lower revenues in the quarter are principally due to a decline in Wireless contribution.
• In the quarter, net special items reduced reported GAAP losses by $10.42 per share. In addition to the goodwill impairment charge, special items include pre-tax charges of $119 million for merger and integration costs related to the Sprint-Nextel merger and associated acquisitions, $56 million for severance, exit costs and asset impairments, pre-tax gains of $44 million from litigation and insurance settlements, and $60 million from an investment. Special items are detailed in the Notes to Financial Data.
• Adjusted OIBDA* exceeded capital expenditures by $446 million in the fourth quarter and $4.3 billion for the full year.
• Consolidated results for the fourth quarter of 2007 include $98 million in operating expenses and $250 million in capital investments associated with the WiMAX initiative. For the full-year 2007, WiMAX operating expenses were $193 million, and capital expenditures were $384 million.
• Interest expense, net of interest income, was $306 million, compared to $333 million in the fourth quarter a year ago.
• The company had an effective income tax benefit rate of 1% in the quarter compared to an effective income tax expense rate of 31% in the year-ago period. The 2007 effective tax rate was impacted by the goodwill impairment charge and a $105 million benefit related to state income tax law changes.
• Net debt* at the end of the fourth quarter of 2007 was $19.7 billion. This compares to $19.9 billion at the end of the third quarter and $20.1 billion at the end of 2006.
• Fourth quarter non-cash compensation expense was $68 million compared to $80 million in 2006.
• On Feb. 27, 2008, Sprint Nextel borrowed $2.5 billion in principal amount under its revolving credit facility. The company has no immediate need for additional liquidity, but in light of current market conditions borrowed the funds to provide greater financial flexibility and to mitigate any potential financing risk related to $1.25 billion in bonds that mature in November 2008, as well as the approximately $400 million outstanding under our commercial paper program, and $600 million of bonds that mature in May, 2009. The company has no other material refinancing scheduled until 2010. About $500 million of borrowing capacity remains available under the revolving credit facility.
• Sprint Nextel's Board of Directors has determined that the company will not declare a dividend for the foreseeable future, in an effort to retain greater financial flexibility.
• The company did not make any purchases under its $6 billion stock buyback authorization in the fourth quarter of 2007 or in the first quarter of 2008. This authorization expired in January 2008.

WIRELESS RESULTS

TABLE No. 2 Selected Unaudited Financial Data (dollars in millions)

                          Quarter Ended          Year-to-Date
                          December 31,           December 31,
                         ---------------   %   -----------------   %
Financial Data            2007    2006    +/-    2007     2006    +/-
                         ------- ------- ----- -------- -------- -----
Net operating revenues   $8,497  $9,001   (6)% $34,700  $35,101   (1)%
Adjusted operating
 income*                    168     652  (74)%   1,429    2,592  (45)%
Adjusted OIBDA*           2,245   2,909  (23)%   9,914   11,678  (15)%
Adjusted OIBDA margin*     28.7%   35.5%          30.9%    36.6%
Capex(1)                 $1,404  $2,238  (37)% $ 4,991  $ 5,846  (15)%

(1)Capex includes re-
 banding capital, but
 excludes rebanding
 costs related to FCC
 licenses.

The following is a discussion of Wireless results:

Subscribers

• Wireless had 53.8 million total subscribers at the end of 2007. This compares with 53.1 million subscribers at the end of 2006. The net growth of 700,000 subscribers for the year reflects a gain of 1.9 million subscribers in prepaid and wholesale segments, offset by a net decline of 1.2 million in direct and affiliate post-paid subscribers.
• At the end of the fourth quarter, Sprint Nextel served a little more than 35 million subscribers on the CDMA platform, 17.3 million on iDEN and 1.4 million PowerSource subscribers who access both platforms.
• The year-end subscriber base consists of approximately 76% post-paid users, 9% prepaid, and 15% in wholesale and affiliates.
• In the fourth quarter, total post-paid subscribers declined 683,000 due to a loss of iDEN users. In the third quarter of 2007, post-paid subscribers declined by 337,000. The increased loss of post-paid subscribers in the fourth quarter reflects lower gross additions, partially offset by fewer deactivations.
• Prepaid net additions for the quarter were 55,000. Prepaid includes 257,000 net additions on the Boost Unlimited plan, and a decline of 202,000 traditional Boost prepaid users. Boost Unlimited is now available to about a third of the U.S. population.
• Wholesale channels added 500,000 subscribers in the quarter.
• In the fourth quarter, Sprint Nextel enhanced its device lineup with the addition of the Touch by HTC(TM) , the Rumor(TM) by LG(R), The Buzz+(TM) ic602 by Motorola, the Centro(TM) by Palm(R), the BlackBerry(R) Pearl(TM) 8130 and two new USB connection cards.

Churn

• Overall, post-paid churn was 2.3% in the quarter.
• In the fourth quarter, the post-paid churn rate was flat with the third quarter for both the iDEN and CDMA bases.
• Boost pre-paid churn was 7.5% compared to 6.2% in the third quarter of 2007 and 6.5% in the fourth quarter of 2006.

Revenues/ARPU

• Net operating revenues declined 2% sequentially and 6% compared to the fourth quarter of 2006. Service revenues declined 3% sequentially and 5% year-over-year due to lower average revenue per customer and a smaller base of post-paid customers. Equipment revenues declined 15% compared to the year-ago period, but were up 2% sequentially. The annual decline reflects more aggressive market pricing and increased sales of lower-priced handsets. The sequential increase is due to higher average priced handset sales.
• Post-paid ARPU was a little more than $58 in the quarter, compared to $59 in the third quarter and a little more than $60 in the fourth quarter of 2006. CDMA post-paid ARPU decreased a little under 1% from both the year-ago period and sequentially. iDEN post-paid ARPU was 7% below the prior year and declined 3% sequentially. The post-paid ARPU decline reflects lower voice revenues, partially offset by increased data revenues.
• Data contributed more than $11 to overall post-paid ARPU in the quarter. Data ARPU on the post-paid CDMA base was more than $14, an increase of 21% from the year-ago period. Data contributed more than $5 to iDEN ARPU, an increase of 10% from the year-ago period.
• Pre-paid ARPU was a little under $28 in the fourth quarter, compared to a little over $30 in the third quarter and a little under $32 in the fourth quarter of 2006. The sequential decline is in part due to a one-time revenue benefit in the third quarter and lower average usage. The annual comparison reflects a decline in average usage. Boost Unlimited was a minor contributor to prepaid revenues in the quarter.

Operating Expenses

• Total operating expenses for the quarter were $8.3 billion after normalizing for special items. This compares with normalized operating expenses of $8.2 billion in the third quarter and $8.3 billion in the fourth quarter of 2006.
• Costs of services increased 3% annually and 1% sequentially. The growth is primarily due to a larger number of cell sites on air.
• Cost of products was 7% below the fourth quarter of 2006 due to the decrease in the cost we pay for handsets. Cost of products in the quarter was flat with the third quarter.
• SG+A expenses increased 6% compared to the fourth quarter of 2006 and 5% sequentially. The year-over-year increase is due to increased customer care costs and higher bad debt expense, partially offset by lower sales costs associated with lower gross additions. The quarter-over-quarter comparison reflects increases in customer care and bad debt and an adjustment to variable compensation that benefited the third quarter.

Capital Spending

Wireless capital expenditures totaled $1.4 billion in the fourth quarter and were $5.0 billion for the full year, or a little over 14% of annual revenues. In 2007, the majority of capital was deployed to increase capacity, enhance and expand the network footprint and triple the footprint of EV-DO Rev. A coverage to areas where 222 million people live and work.

The following is a discussion of Wireline results.

• Wireline revenues reflect growth in Internet Protocol (IP) services, offset by declines in voice and legacy data services.
• IP revenues increased 42% annually and 11% sequentially, driven by growth in demand from cable partners and enterprise customers. In the fourth quarter, the company added 700,000 new cable customer lines in service. Sprint Nextel is now serving 3.3 million lines for cable partners and has service agreements with cable companies that collectively pass 31 million households.
• Voice revenues decreased 9% compared to the fourth quarter of 2006 and 4% sequentially. The annual decline was due to ongoing pressures in consumer and business segments, partially offset by increased sales to Wireless. Sequentially, voice revenues were down in all segments.
• Data revenues from legacy technologies, including private line, frame relay and ATM, declined 17% year-over-year and 2% sequentially. Legacy data revenues continue to be impacted, in part by customer migrations to IP services. The transition to an all-IP network is ahead of schedule, and customer satisfaction with IP migrations remains very high.
• After normalizing for special items, total operating expenses were 5% below the fourth quarter of 2006 and declined 1% sequentially. Normalized SG+A expenses includes a $40 million credit in the quarter due to prepaid licenses for the use of certain patents.
• Full-year capital expenditures of $632 million were approximately 10% of revenues.

Forward-Looking Guidance

Sprint Nextel is currently assessing a reorganization of its business model, associated sales, distribution and marketing plans, and its financial outlook. The company expects to provide an update when these plans are finalized. In the first quarter of 2008, Sprint Nextel currently expects to report a sequential increase in post-paid churn and a decline in Wireless post-paid subscribers of approximately 1.2 million customers, which is unlikely to improve in the second quarter. We also expect continued downward pressure on postpaid ARPU in the first quarter. First quarter Adjusted OIBDA* is projected to be in the range of $1.8 billion to $1.9 billion.

*FINANCIAL MEASURES

Sprint Nextel provides financial measures generated using generally accepted accounting principles (GAAP) and using adjustments to GAAP (non-GAAP). The non-GAAP financial measures reflect industry conventions, or standard measures of liquidity, profitability or performance commonly used by the investment community for comparability purposes. These non-GAAP measures are not measurements under accounting principles generally accepted in the United States. These measurements should be considered in addition to, but not as a substitute for, the information contained in our financial statements prepared in accordance with GAAP. We have defined below each of the non-GAAP measures we use, but these measures may not be synonymous to similar measurement terms used by other companies.

Sprint Nextel provides reconciliations of these non-GAAP measures in its financial reporting. Because Sprint Nextel does not predict special items that might occur in the future, and our forecasts are developed at a level of detail different than that used to prepare GAAP-based financial measures, Sprint Nextel does not provide reconciliations to GAAP of its forward-looking financial measures.

The measures used in this release include the following:

Adjusted Earnings (Loss) per Share (EPS) is defined as income (loss) from continuing operations, before special items, net of tax and the diluted EPS calculated thereon. Adjusted EPS before Amortization is defined as income (loss) from continuing operations before special items and amortization, net of tax, and the diluted EPS calculated thereon. These non-GAAP measures should be used in addition to, but not as a substitute for, the analysis provided in the statement of operations. We believe that these measures are useful because they allow investors to evaluate our performance for different periods on a more comparable basis by excluding items that relate to acquired amortizable intangible assets and not to the ongoing operations of our businesses.

Adjusted Operating Income (Loss) is defined as operating income (loss) before special items. This non-GAAP measure should be used in addition to, but not as a substitute for, the analysis provided in the statement of operations. We believe this measure is useful because it allows investors to evaluate our operating results for different periods on a more comparable basis by excluding special items.

Adjusted OIBDA is defined as operating income before depreciation, amortization, severance, exit costs and asset impairments, and special items. Adjusted OIBDA Margin represents Adjusted OIBDA divided by non-equipment net operating revenues for Wireless and Adjusted OIBDA divided by net operating revenues for Long Distance. These non-GAAP measures should be used in addition to, but not as a substitute for, the analysis provided in the statement of operations. We believe that Adjusted OIBDA and Adjusted OIBDA Margin provide useful information to investors because they are an indicator of the strength and performance of our ongoing business operations, including our ability to fund discretionary spending such as capital expenditures, spectrum acquisitions and other investments and our ability to incur and service debt. While depreciation and amortization are considered operating costs under generally accepted accounting principles, these expenses primarily represent non-cash current period allocation of costs associated with long-lived assets acquired or constructed in prior periods. Adjusted OIBDA and Adjusted OIBDA Margin are calculations commonly used as a basis for investors, analysts and credit rating agencies to evaluate and compare the periodic and future operating performance and value of companies within the telecommunications industry.

Free Cash Flow is defined as the change in cash and cash equivalents less the change in debt, investment in certain securities, proceeds from common stock and other financing activities, net, from continuing operations. This non-GAAP measure should be used in addition to, but not as a substitute for, the analysis provided in the statement of cash flows. We believe that Free Cash Flow provides useful information to investors, analysts and our management about the cash generated by our core operations after interest and dividends and our ability to fund scheduled debt maturities and other financing activities, including discretionary refinancing and retirement of debt and purchase or sale of investments.

Net Debt is consolidated debt, including current maturities, less cash and cash equivalents, current marketable securities and restricted cash. This non-GAAP measure should be used in addition to, but not as a substitute for, the analysis provided in the balance sheet and statement of cash flows. We believe that Net Debt provides useful information to investors, analysts and credit rating agencies about the capacity of the company to reduce the debt load and improve its capital structure.

SAFE HARBOR

This news release includes "forward-looking statements" within the meaning of the securities laws. The statements in this news release regarding the business outlook, expected performance, forward-looking guidance, as well as other statements that are not historical facts, are forward-looking statements. The words "estimate," "project," "forecast," "intend," "expect," "believe," "target," "providing guidance" and similar expressions are intended to identify forward-looking statements. Forward-looking statements are estimates and projections reflecting management's judgment based on currently available information and involve a number of risks and uncertainties that could cause actual results to differ materially from those suggested by the forward-looking statements. With respect to these forward-looking statements, management has made assumptions regarding, among other things, customer and network usage, customer growth and retention, pricing, operating costs, the timing of various events and the economic and regulatory environment.

Future performance cannot be assured. Actual results may differ materially from those in the forward-looking statements. Some factors that could cause actual results to differ include:

• the effects of vigorous competition, including the impact of competition on the price we are able to charge customers for services and equipment we provide and our ability to attract new customers and retain existing customers; the overall demand for our service offerings, including the impact of decisions of new subscribers between our post-paid and prepaid services offerings and between our two network platforms; and the impact of new, emerging and competing technologies on our business;
• the impact of overall wireless market penetration on our ability to attract and retain customers with good credit standing and the intensified competition among wireless carriers for those customers;
• the impact of difficulties we may continue to encounter in connection with the integration of the pre-merger Sprint and Nextel businesses, and the integration of the businesses and assets of Nextel Partners, Inc. and the PCS Affiliates that provide wireless PCS under the Sprint(R) brand name, that we have acquired, including the risk that these difficulties may limit our ability to fully integrate the operations of these businesses and the risk that we will be unable to continue to retain key employees;
• the uncertainties related to the implementation of our business strategies, investments in our networks, our systems, and other businesses, including investments required in connection with our planned deployment of a next-generation broadband wireless network;
• the costs and business risks associated with providing new services and entering new geographic markets, including with respect to our development of new services expected to be provided using the next-generation broadband wireless network that we plan to deploy;
• the impact of potential adverse changes in the ratings afforded our debt securities by ratings agencies;
• the effects of mergers and consolidations and new entrants in the communications industry and unexpected announcements or developments from others in the communications industry;
• unexpected results of litigation filed against us;
• the inability of third parties to perform to our requirements under agreements related to our business operations, including a significant adverse change in the ability of any of our handset suppliers to provide devices, or Motorola, Inc.'s ability or willingness to provide related equipment and software applications, or to develop new technologies or features for our iDEN(R) network;
• the impact of adverse network performance;
• the costs and/or potential customer impacts of compliance with regulatory mandates, particularly requirements related to the reconfiguration of the 800 MHz band used to operate our iDEN network as contemplated by the Federal Communications Commission's Report and Order released in August 2004 as supplemented by subsequent memoranda;
• equipment failure, natural disasters, terrorist acts, or other breaches of network or information technology security;
• one or more of the markets in which we compete being impacted by changes in political, economic or other factors such as monetary policy, legal and regulatory changes or other external factors over which we have no control; and
• other risks referenced from time to time in our filings with the Securities and Exchange Commission, including our Form 10-K for the year ended December 31, 2006 and our upcoming Form 10-K for the year ended December 31, 2007, in Part I, Item 1A, "Risk Factors."

Sprint Nextel believes these forward-looking statements are reasonable; however, you should not place undue reliance on forward-looking statements, which are based on current expectations and speak only as of the date of this release. Sprint Nextel is not obligated to publicly release any revisions to forward-looking statements to reflect events after the date of this release.

ABOUT SPRINT NEXTEL

Sprint Nextel offers a comprehensive range of wireless and wireline communications services bringing the freedom of mobility to consumers, businesses and government users. Sprint Nextel is widely recognized for developing, engineering and deploying innovative technologies, including two robust wireless networks serving about 54 million customers at the end of the fourth quarter 2007; industry-leading mobile data services; instant national and international walkie-talkie capabilities; and a global Tier 1 Internet backbone. For more information, visit www.sprint.com.