Nextel LatAm Q1 Profit Jumps 44% to US$65mn

Latin American digital trunking holding company NII Holdings posted net profits of US$65mn in the first quarter, up 44% compared to 1Q05, the company said in a statement.

NII, which operates under the Nextel brand name in Argentina, Brazil, Mexico and Peru, reaped revenues of US$528mn in the quarter, up 43% from the same period last year.

The company ended 1Q06 with 2.7 million subscribers, up 84% year on year. Consolidated operating income before depreciation and amortization rose 53% to US$154mn.

Monthly ARPU was US$58, up from US$56 in 1Q05. The churn rate was 1.6%, a 20-basis point improvement over the previous year.

ARPU in Mexico and Brazil rose to US$79 from US$76 and to US$45 from US$38 respectively while it dropped in Argentina and Peru to US$39from US$40 and US$37 from US$41. In the case of the latter, Tim Perrot, head of investor relations assured BNamericas the drop was due to seasonality of the first quarter and highlighted the low churn rate in Aregntina of 1.2% and 1.9% in the case of Peru.

"We are excited about our future and we are at the cusp of reaping the rewards of our expansion plan, positioning NII for a period of sustained growth and profitability," NII president and COO Lo van Gemert said.

Perrot attributed NII's the strong growth in the quarter to the company's strong expansion drive.

"We are seeing some of the successes of our growth and expansion plans from last year that are beginning to help us this year. We are in the midst of a pretty significant expansion plan in Mexico and Brazil and slight less in Argentina and Peru," Perrot told BNamericas.

NII is expecting to launch service in 47 new cities in 2006, covering an additional 19 million pops, primarily in Mexico and Brazil.

During the first quarter Nextel Mexico launched service in Cancun, Reynosa and Matamoros - representing over 2 million additional pops. The company will expand south along Mexico's Pacific coast, Perrot said.

Nextel Brazil expanded coverage in the greater Porto Alegre area - viewed as the industrial hub of southern Brazil - representing an incremental 1.2 million pops.

Total consolidated capital expenditure, including capitalized interest, was US$129mn during the first three months of this year.

NII did not changed its guidance for 2006 announced at the end of last year of 800,000 new subscribers, US$2.3bn in revenues, US$675mn in OIBDA and US$575mn in capital expenditure.

Perrot expects growth to be boosted this year by the launch of new services including Nexmail, web direct, which links the phones to PCs and the launch of the Blackberry e-handheld device.

Formerly known as Nextel International, NII Holdings is a spin-off of US operator Nextel Communications and focuses on push-to-talk mobile cellular services in key Latin American markets.

BNamericas.com"

Posted to the site on 1st May 2006