[May 10, 1999]

Microsoft Invests $600 Million In Nextel, Companies Team To Deliver Wireless Access To MSN Portal

Nextel Communications Inc., a leading provider of fully integrated wireless communications, and Microsoft Corp. announced an agreement that will enable Nextel customers to access a customized set of Internet services offered through a co-branded version of the MSN portal. With this agreement, Microsoft has committed to invest $600 million in Nextel common stock in support of Nextel's leading position in the development and deployment of these wireless Internet services. This investment is expected to be used by Nextel to advance the deployment of these services, develop additional digital services, expand the Nextel National Network in the United States, and fund system development and expansion in other countries in which Nextel operates. The price of the stock was fixed at $36, and it will be subject to certain transfer and standstill restrictions.

The wireless offerings will provide Nextel customers access to the MSN network of Internet services, which will keep them in touch with their information while on the go. When fully operational, as part of the Nextel Online offering, the co-marketed services are expected to include e-mail, calendar functionality, address book contacts and access to Web-based content.

"The combination of Nextel's integrated data network and Internet-ready phones will provide our customers with the ability to access information and applications that are important to them, wherever they are. This is the ultimate last mile, and we are delivering it wirelessly," said Dan Akerson, chairman and CEO of Nextel Communications. "We are very excited about this strategic relationship with Microsoft and look forward to being able to extend the power of its applications and services to customers throughout the Nextel National Network."

"Microsoft and Nextel will deliver the next generation of wireless services to enable people everywhere to stay in touch with the information they need, regardless of location," said Bill Gates, chairman and CEO of Microsoft. "The combination of Microsoft platforms, including Windows CE-based devices, with MSN services and Nextel's highly functional network and service infrastructure will enable these powerful new services to be delivered efficiently and effectively to benefit the widest range of customers."

Nextel expects that later this year Nextel Online customers will be able to use their Nextel phones to access the new services mentioned above. These services are being designed and deployed so that Nextel customers also will be able to access them in combination with a range of other devices, including personal digital assistants (PDAs), palmtop computers, PCs and Windows CE operating system-based devices. Nextel will also work with Microsoft to help define the requirements for Microsoft's microbrowser technology for wireless devices.

Utilizing the MSN portal, Nextel will provide a "Web-computing platform" for its customers via the company's Nextel Online offering. It is planned that Nextel Online will include three fundamental sets of services for Nextel customers. The first set of services will enable Nextel customers to use Nextel Online as an efficient and user-friendly way to interact with Nextel and other members of the Nextel Business Networkssm. In doing so, customers will be able to utilize Nextel's online customer care capabilities to find out information on Nextel services, phones, coverage and special offerings. Customers will also be able to purchase additional accessories or telephones online and will soon be able to view and pay their bills online. In addition, Nextel customers will be able to take advantage of the Nextel Online Messaging Center to send short message service (SMS) messages to other Nextel users. Nextel recently announced that it is now sending more than 1 million SMS messages a month by virtue of this efficient integrated offering.

The second set of services will include a multitude of applications, content and services that Nextel will make available via the co-branded MSN portal. Nextel Online customers will be able to select from these applications and services and personalize them to both their PC and to their Nextel phone. These offerings, available to Nextel phone users and their nonmobile associates, are expected to provide Nextel's customer base of more than 3 million with the most robust set of integrated offerings available from the Internet over a wireless network. E-mail, calendar, address book and Web-based content services will be introduced with the launch of Nextel Online with additional functionality integrated over time.

The third set of offerings enabled by the co-branded MSN portal will include Web-based applications developed by third parties specifically for business users of the rapidly growing Nextel Business Networks. Today, more than 90 organizations have joined Nextel's Developers Program, and will offer a variety of applications developed specially for individual customer segments. These applications will be accessible from Nextel's Internet-ready phones over the wireless Internet network.

In a separate announcement today, Microsoft announced plans to deliver a wireless portal designed to work with handheld devices, cellular phones and interactive pagers via the MSN network of Internet services. Internet users will be able to access most popular services on MSN, including e-mail and address books from the MSN Hotmail Web-based e-mail service; news, sports and weather from MSNBC; stock updates from the MSN MoneyCentral personal finance online service; forthcoming calendar features from recently acquired Jump! Networks; and other Web-based content such as door-to-door directions and weather. The wireless portal will be available later this year in conjunction with the next major upgrade to MSN.

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