NII Holdings (NIHD), which operates in Latin America under the Nextel brand, is again pushing out its expected launch dates for 3G serivces. The company now expects to launch services in Chile by mid-year; in Mexico late in the third quarter; and by the end of the year in Brazil.
During a conference call for its financial results, NII Holdings’ CEO Steve Dussek, cited problems in construction sites and delays in equipment delivery and deployment for the delay.
Jennifer Fritzsche, Wells Fargo Securities senior analyst, noted that the conference call tone was mixed to slightly negative “Citing delays in the construction phase of the builds, [NII Holdings] made the decision to bring all future construction management in-house and no longer rely on contractors to execute the PM piece of the build. The company insisted that the delays are due to construction-related activities only and not caused by technical issues,” Fritzsche noted in a research note.
“Mexico and Brazil are very large countries and we had problems in the acquisition and construction sites, delivery of equipment and network deployment, but now we are working closely with suppliers in the construction of these sites and the network, using our expertise to ensure that fulfill this news chedule,” Dussek said.
As for its financial results, NII said company added 1.684 million net subscribers to its network in 2011, bringing its total year-end subscriber base to 10.7 million. The carrier noted the introduction of a new prepaid plan in Argentina drove strength in fourth quarter customer additions, which totaled 100,000 net adds.
NII reported consolidated operating revenues of $6.7 billion in 2011, up 20% compared to 2010; consolidated operating income before depreciation and amortization of $1.56 billion, a 9% increase compared to 2010; and consolidated operating income of $905 million, up 3% compared to 2010. Net income for full year was $199 million, or $1.17 per basic share.
Wells Fargo Securities’ Fritzsche noted that while customer growth for the fourth quarter was ahead of estimates, revenue and earnings before interest, taxes, depreciation and amortization were weak. NII reported Q4 revenue and EBITDA of $1.6 billion and $277 million versus Wells Fargo’s estimates of $1.77 billion and $313 million, respectively.
Fritzsche also noted flat consolidated average revenue per user of $48, with Brazil ARPU particularly weak.
Regarding its 2012 outlook, NII Holdings announced forecasts of total net subscriber additions of approximately 1.4 million, and consolidated operating revenues of approximately $7.1 billion. The company also expects consolidated OIBDA of approximately $1.4 billion, which includes the impact of approximately $50 million of non-cash equity compensation expense.
“The OIBDA outlook also includes the impact of start up costs related to the development and launch of the company’s planned W-CDMA networks and costs to support related initiatives, including investments in brand, expansion of distribution channels, and IT and back office systems,” NII Holdings noted in a statement.
Consolidated capital expenditures are expected to reach approximately $1.7 billion in 2012, which includes investments related to the deployment of W-CDMA networks and supporting systems, and the enhancement of the capacity of the company’s iDEN networks to support customer growth.