After delaying the deployment of its 3G network, Nextel Chile (owned by U.S.-based NII Holdings, Inc.) launched 3G voice and data mobile service May 9, thereby seeking a 5-12% share of the mobile market in that country.
The launch follows a mobile broadband pilot program trial last October that offered current Nextel customers 1GB data plans. The pilot was available in cities in Chile where Nextel offered push-to-talk (PTT) services: Antofagasta, Calama, Valparaíso, Viña del Mar, San Antonio, Rancagua, Santiago, and Concepción.
Nextel Chile said its next step, which is expected to occur in the coming months, is to launch PTT services across its 3G network. In Chile, NII Holdings secured 60 megahertz of 3G spectrum in 2009. The initial plan was to launch 3G data service in the fourth quarter of 2011, followed by 3G voice and PTT services, which were initially planned for the first quarter of next year.
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Delays affecting 3G service launches could impact Nextel operations across the Latin America region. Nextel’s competitors already offer 3G services and some of them are now focused on participating in the next LTE auction. For now, Nextel is not expected to bid in any 4G auctions where it operates.
Financial analysts have noted that the carrier’s 3G plans could result in the carrier losing subscribers to rival 3G operators that have already launched commercial services or losing momentum for its unique PTT service that continues to suffer from a lack of compelling devices geared toward an increasingly smartphone-savvy public.
During the CTIA event held this week in New Orleans, Wells Fargo Senior Analyst Jennifer M. Fritzsche met with NII Holdings’ management. “We expect the second half of 2012 to show better subscriber growth than the first half of 2012. NIHD seems to be focused on lowering its retention costs. While this is a positive for the margins, this likely will result in higher near-term churn trends in the region. We have modeled a sequential increase in churn, but believe the increase may be closer to 20 basis points versus Q1 or our current model,” she wrote in report.
Related to 3G launches, Fritzsche mentioned the launch of Nextel’s marketing and advertising campaign for 3G service in Peru last week. “We view this as a significant positive. NII reiterated that its targets for its future 2012 3G launches remain very much on target.”
