US-based operator NII Holdings, which provides wireless services under the Nextel brand in Brazil, Mexico, Argentina and Chile, has reported a 22% year-on-year decline in consolidated operating revenues for the third quarter of 2013 to USD1.101 billion from USD1.407 billion a year earlier. Service and other revenues accounted for USD1.054 billion of the total, compared to USD1.342 billion in the third quarter of 2012. Adjusted operating income before depreciation and amortisation (OIBDA), which excludes the impact of non-cash asset impairment and restructuring charges, decreased 78% year-on-year to USD52 million in the three months ended 30 September 2013. The decrease in OIBDA was primarily driven by incremental investments related to the company’s deployment of its planned next generation networks (NGNs) and costs to migrate customers to the firm’s 3G network in Mexico. NII’s consolidated net loss widened from USD82.4 million in Q3 2012 to USD299.9 million twelve months later. The firm reported a net subscriber loss of 178,000 during the third quarter of 2013 to end the period with 9.736 million users, compared to 9.845 million a year earlier. Subscribers in Brazil totalled 3.888 million, down from 4.138 million at 30 September 2012, while customers of Nextel Mexico fell 5% year-on-year to 3.655 million and Nextel Argentina users grew 16% to 1.965 million.
‘While we have met all of our network build goals, we did not effectively address challenges in Mexico associated with [Sprint’s] iDEN shutdown in the US or prevent the deterioration of ARPU in Brazil,’ commented NII Holdings’ CEO Steve Shindler, adding: ‘We’re extremely disappointed with our results for the quarter. In order to return to the level of growth that has made us successful in the past, we recently began implementing a set of initiatives focused on recovering lost ground and enhancing our competitive position in our major markets that we call Project Accelerate.’ These initiatives include: launching aggressive marketing campaigns and pricing plans to take advantage of the holiday season in Mexico and Brazil; offering ‘iconic’ smartphones to improve its device portfolio by the first half of 2014; accelerating early deployment of LTE in select cities in 2014; and streamlining the organisation, refocusing resources on customer facing and selling activities and eliminating costs that are not critical to the growth agenda.
NII has said that it will not achieve its financial guidance for 2013 ‘given the weak year-to-date operational and financial results, the continued depreciation of local currency exchange rates and the expected impact of Project Accelerate on its results for the fourth quarter’. It has not yet updated its outlook, but expects to miss its consolidated adjusted OIBDA guidance by USD200 million or more.