NII Holdings (NIHD) said it’s planned 3G launches were on track. Nextel’s owner unveiled push-to-talk service on a W-CDMA platform in Peru last month. The 3G launch in Mexico and Brazil are still expected by the first half of 2012 with a soft launch in Chile towards the end of this year followed by full launch during the first quarter of next year.
Financial results for the quarter included consolidated operating revenues of $1.75 billion, a 21% increase compared to the third quarter of 2010, and consolidated operating interest before depreciation and amortization of $381 million, a 5% increase compared to the same period last year. For the third quarter of 2011, the company generated consolidated operating income of $212 million and consolidated net loss of $3 million, or 2 cents per basic share.
During the period, NII Holdings said it added 433,000 net subscribers to its network, bringing its ending subscriber base to 10.2 million, a 19% increase year-over-year. Mexico was main driver of the upside.
Jennifer Fritzsche, senior analyst at Wells Fargo Securities, noted that NII’s 3G-based PTT offering in Peru has exceeded expectations from tech/network standpoint and subscribers growth thus far has been in line with expectations. The carrier’s Brazilian operations posted 210,000 net customer addition, which were just ahead of estimates; Mexico added 120,000 customers versus estimates of 80,000 net customer additions; Peru posted 66,000 net additions, which was just short of the 70,000 customer addition estimates; and Argentina’s 36,000 net additions were nearly on top of the 35,000 customer additions forecast. Wells Fargo noted the drivers in growth for both Mexico and Brazil was better gross adds as churn in Brazil and Mexico was a bit higher than estimates.
The company ended the quarter with $4.1 billion in total long-term debt and $2.6 billion in consolidated cash and investments, resulting in $1.5 billion of net debt at the end of the quarter.
NII Holdings said results for the period were affected by depreciating local currency values relative to the dollar late in the quarter. The company also incurred an increase in operating expenses related to the deployment of its 3G networks and a more intense competitive environment in Brazil.
In July, Brazilian carrier Vivo launched its PTT (PTT) service under the name “Vivo Direto.” Although similar to Nextel’s offering, Vivo’s PTT is based on GSM technology (3G and EDGE) instead of the iDEN standard used by Nextel for its current PTT services in Brazil. Prior to Vivo’s launch, Nextel was the only PTT player in Brazil.
In terms of branding expense, NII expects investment will remain flat sequentially going into the fourth quarter.
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