NII Holdings posts 44% drop in Q3 OIBDA

8 Nov 2012

US-based operator NII Holdings, which provides wireless services under the Nextel brand in Brazil, Mexico, Argentina, Peru and Chile, has announced its consolidated financial results for the three- and nine-month periods ended 30 September 2012. The company said it generated consolidated operating revenues of USD1.491 billion in the third quarter of 2012, a decrease of 15% from the year-ago period, while consolidated sales in the first nine months of 2012 totalled USD4.62 billion, down from USD5.135 billion twelve months earlier. Consolidated operating income before depreciation and amortisation (OIBDA) plummeted 44% year-on-year to USD217.9 million in the third quarter of 2012, resulting from weaker average foreign currency exchange rates, lower average revenue per user (ARPU) on a local currency basis and incremental expenses related to the deployment of the firm’s planned third-generation networks. NII reported a consolidated net loss of USD82.4 million in Q3 2012 (compared to a loss of USD300,000 in the year-ago period) and a loss of USD172.3 million in 9M12 (compared to a net profit of USD222 million twelve months earlier). Investments in 3G networks, as well as the ongoing investments in increasing capacity of the company’s iDEN networks, resulted in consolidated capital expenditures of USD389 million for the quarter.

NII Holdings added 152,500 net subscribers in Q3 2012, bringing its total customer base to 11.357 million, compared to 10.245 million at end-September 2011. Nextel Brazil customers totalled 4.138 million at the end of the third quarter of 2012 (up from 3.923 million a year earlier), followed by Mexico with 3.861 million (3.623 million), Argentina with 1.692 million (1.254 million) and Peru with 1.512 million (1.372 million). ‘A key component of our long-term strategy is the deployment of our 3G networks, which will enable us to expand and improve our competitive service offering,’ commented Steve Dussek, NII Holdings’ CEO, adding: ‘We have reached several milestones in this effort, including our recent launch of the initial phase of our 3G network in Mexico, and our launch of 3G services in Chile and Peru. We are experiencing good demand for our 3G services adding 3G voice and data customers in each of our markets where our new networks have been launched, and we are encouraged about the growth we expect to generate on these networks in the future. However, we continue to experience problems executing on our 3G deployment in Brazil, and we are behind schedule. Our team is working hard to get our new services up and running as soon as possible. We expect to launch our first wave of 3G services supported by this new network in select cities in Brazil later this year, initially focusing on data services and adding new services and features more broadly in 2013.’

United States, NII Holdings