On Apr 4, 2014, we issued an updated research report on
NII Holdings Inc.
). The company lost a considerable number of subscribers in the
fourth quarter of 2013. Moreover, higher churns, weaker exchange
rate and lower ARPU will continue to hurt the company's
profitability going forward.
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Except for one quarter, NII Holdings has delivered negative
earnings surprise in three quarters last year, with an average
beat of negative 23.91%. The company reported mixed financial
results for the fourth quarter of fiscal 2013 with the bottom
line missing the Zacks Consensus Estimate but the top line
outpacing the same.
In order to strengthen its market position, NII Holdings has
launched a new business objective called Project Accelerate. This
is likely to help the company gain market share and remain
competitive through significant investments in marketing and
network infrastructure development.
NII Holdings has already started offering 3G service in Chile,
Mexico and Brazil. The company continues to shift customers from
iDEN to 3G in Mexico. Moreover, launch of high-end smartphones
like iPhones and Galaxy 4 coupled with the rollout of innovative
service plans targeting high-valued individuals are expected to
boost revenues from the Brazilian markets. Furthermore, with the
deployment of attractive 99 Real rate plans in Brazil, the
company remains highly optimistic of gaining solid subscriber
growth going forward.
NII Holdings is dependent on a single infrastructure supplier,
Motorola Solutions Inc.
). The company confirmed its extended relationship with Motorola
Solutions for the supply of iDEN handsets and iDEN network
) acquisition of BellSouth International's wireless assets in
Latin America and
) acquisitions of TIM Peru and Smartcom S.A. in Chile are
intensifying competition in these markets.
Moreover, continuous loss of subscribers coupled with a highly
leverage balance sheet are likely to act as headwinds for the
company moving ahead.
NII Holdings currently carries a Zacks Rank #3 (Hold).