Craig McCaw, Motorola and Nextel Will Cooperate To Create Wireless Services For Work Groups.

RUTHERFORD, N.J.--(BUSINESS WIRE)--April 5, 1995--Craig McCaw, a pioneer in wireless communications, and other McCaw family members have agreed to invest up to $1.1 billion in stock of Nextel Communications, Inc. and will provide strategic direction of the company to focus on enhanced two-way radio dispatch services for business users who need integrated wireless communications.

McCaw said he is not interested in attempting to copy cellular, PCS or paging. "I have been there, done that and it is not my intent to do what I've already done," McCaw said. "We will mine for gold in the new field of wireless communications for work groups," he continued, "and by emphasizing dispatch, messaging, and data in combination with telephone interconnect, Nextel can enhance the quality of life for mobile work teams, an important and growing sector of the U.S. workforce. By effectively using Motorola's technology for fleets and crews of mobile workers, I believe that Nextel has the potential to be a unique and important contributor to the wireless industry."

In citing his continuing belief in the development of multiple wireless services packaged in one device, McCaw said, "We know there is a strong base of potential customers for integrated business communications services in the nearly 20 million current two-way radio users in the U.S. alone."

While current Nextel shareholders must approve the transaction, Nextel's Board of Directors already has unanimously approved the agreement.

Completion of the agreement also is subject to various regulatory and third-party approvals.

Under terms of the agreement, McCaw and other members of his family may invest up to $1.1 billion in Nextel stock over the next six years through share purchases from both Nextel and Motorola. McCaw will become a member of the Nextel Board of Directors with control over a newly created operations committee.

Nextel is a provider of integrated wireless business communications services, including enhanced dispatch, alphanumeric short message paging, mobile telephone and data services throughout much of the U.S. Motorola serves as Nextel's technology provider and supplier of infrastructure and subscriber equipment.

Morgan O'Brien, chairman of Nextel Communications, Inc., said, "What we are learning is that as we move to new ways of working as groups we need to find new tools to allow them to communicate. Mixing one part Craig McCaw vision with one part Motorola technology gives us at Nextel a recipe for even more potent integrated wireless business solutions."

Christopher Galvin, president and chief operating officer of Motorola, indicated that Motorola looks forward to its role as the technology provider and equipment manufacturer. "We invented the dispatch business and now we're reinventing it. This transaction also is the first step in reducing our ownership in Nextel," Galvin said.

In a separate announcement, Motorola outlined several steps it is taking to drive the success of this new integrated wireless business communications industry. The company said it would rename its MIRS technology iDEN, or Integrated Dispatch Enhanced Network, and license essential intellectual property rights to qualified manufacturers. In addition, Motorola has committed to make several technology improvements that will enhance reliability and audio quality under terms of a revised supply agreement. Motorola feels these steps will enhance the global opportunties for this exciting technology.

The agreement with the McCaw family includes the immediate purchase of $14.9 million of Nextel stock at a per share price of $12.25. In addition, upon closing, McCaw will purchase for $300 million, 8.16 million preferred units of Nextel shares, each convertible into three common shares. McCaw also will be granted options to purchase: up to 15 million common shares within two years of the closing at an exercise price of $15.50 per share, up to 15 million common shares within four years of the closing at $18.50 per share, and up to 5 million common shares within six years of the closing at $21.50 per share. The second and third options will be exercisable only to the extent that the first and second options, respectively, are exercised.

McCaw also will purchase 4 million Nextel common shares from Motorola for $49 million. Motorola has granted McCaw options on 9 million shares over the next six years at exercise prices and dates identical to the Nextel options, as well as a right of first refusal on its existing stock position in Nextel.

Under the agreement, a newly formed operations committee will be responsible for formulating and proposing key tenets of Nextel's corporate strategy. McCaw is entitled to appoint a majority of the operations committee's members and a total of three board members for so long as he continues to meet certain ownership thresholds and makes certain additional investments in the company.

Nextel reported in a recent 10-K filing that it expected to seek additional financing over the next several years. The investment by McCaw, as well as the potential option exercises, are expected to reduce significantly the amount of money to be raised.

CONTACT: Nextel

Paul Blalock, 201/531-5200

Susan Suss, 212/878-4638

or

Motorola

George Grimsrud, 708/576-2346

Anna-Lise Farmer, 708/538-3113

or

McCaw Family

Roger Nyhus, 206/915-3878 or 206/720-1739