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NII FY net loss widens to USD1.65bn

3 Mar 2014

US-based operator NII Holdings, which provides wireless services under the brand Nextel in Brazil, Mexico, Argentina and Chile, has reported a 17% year-on-year decline in consolidated operating revenues for the twelve months ended 31 December 2013 to USD4.773 billion from USD5.743 billion a year earlier. Service and other revenues accounted for USD4.574 billion of the total, compared to USD5.465 billion in 2012. Adjusted operating income before depreciation and amortisation (OIBDA), which excludes the impact of non-cash asset impairment and restructuring charges, totalled USD324.3 million in 2013, down 66% from USD953.9 million the previous year, primarily driven by incremental investments related to the company’s deployment of next generation networks (NGNs). NII’s consolidated net loss widened from USD765.2 million in 2012 to USD1.650 billion twelve months later.

NII reported a net subscriber loss of 213,000 during full year 2013 (247,000 in Q4, including 390,000 in Mexico) to end the period with 9.489 million users, a decrease of 2% from 9.702 million a year earlier. Such declines reflected the combined impact of continuing challenges affecting the company’s operations in Mexico and its decision to modify its deactivation policy for inactive pre-paid subscribers, which resulted in a higher level of pre-paid subscriber deactivations, particularly in Mexico. Of the total, W-CDMA customers totalled 1.742 million at 31 December 2013, up from 204,500 twelve months earlier. Subscribers in Brazil totalled 3.958 million (including 337,900 W-CDMA users), up slightly from 3.846 million at end-2012, while customers of Nextel Mexico fell 16% year-on-year to 3.265 million (including 1.189 million 3G) and Nextel Argentina users grew 15% to 2.023 million.

For 2014, NII expects to grow its subscriber base and to invest between USD600 million and USD700 million in capital expenditures, although the company is not providing guidance on operating revenues, adjusted OIBDA or net subscriber additions at this time. ‘We are clearly disappointed with our operational performance in 2013, and we are taking actions to improve our business results, including the launch of Project Accelerate, a programme designed to build the foundation for growth as we use our 3G networks to drive operational improvements in 2014,’ commented Steve Shindler, NII Holdings’ CEO, adding: ‘We are seeing early encouraging signs of growth in subscribers purchasing 3G services in Brazil, but have more work to turn around our business in Mexico as we continue to suffer customer losses in that market. We believe that as we enter 2014 with our best-in-class 3G networks, differentiated service, strong brand and improving portfolio of devices, we are in a much stronger position to compete effectively in our core markets.’

Argentina, Brazil, Mexico, United States, Claro-nxt (formerly Nextel Telecomunicacoes), FiberCorp, Nextel de Mexico, NII Holdings, WOM

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