Nextel LatAm Q2 Profit Up 83%
Latin American digital trunking holding company NII Holdings posted a profit of US$55.9mn in the second quarter, up 83% compared to its US$30.5mn profit in 2Q05, the company said in a statement.
Second quarter consolidated revenues were US$556mn, up 35.5% year-on-year compared to US$410mn, while operating income before depreciation and amortization (Oibda) was US$155mn, up 31%.
The group now has a total of 2.9 million subscribers, with 218,600 net additions in the quarter, up 62% compared to net adds in 2Q05.
On the strength of these results NII has adjusted its 2006 net adds guidance to 880,000 from the previous projection of 800,000.
NII attributed the improvement mainly to its ongoing network expansion program, with 900 sites deployed in the 12 months ending June 2006, NII chief financial officer Byron Siliezar told BNamericas.
The plan for 2006 is to expand to 43 new cities with additional coverage in areas with a population of 19 million people, mainly in Brazil and Mexico. Last quarter NII expanded to nine cities adding nine million pops and adding to the 11 cities launched in the first quarter.
Total capex this year should be in the order of US$600mn, up from US$470mn in 2005, and NII does not expect to need to expand further after mid-2007, Siliezar said. This can be self-financed since the company ended the quarter with cash and short-term investments totaling US$871mn, he added.
Mexico accounted for 56% of revenues in the second quarter, bringing in US$313mn and ending the period with a client base of 1.3 million. Mexico is also the strongest market in terms of ARPU, at US$76, while NII's average ARPU is now US$57.
Nextel Perú has the lowest ARPU, at US$35, but stands out as the market with the best penetration of data services, Siliezar said estimating that 35-40% of Peruvian customers use such services.
Despite evidence that data applications are being well accepted in countries like Peru, Argentina and Brazil, NII has not yet decided whether to launch its push to mail service in markets other than Mexico. However, a decision could be in the offing since NII typically allows two quarters to assess service performance and Nextel Mexico launched the service in February, Siliezar said.
In June Chile's supreme court finally ruled that NII's local unit could launch digital trunking operations. For the time being NII will run a small digital network, which is already serving clients, and will decide before year-end whether to increase the operation or not, Siliezar said.
BNAmericas.com"
Posted to the site on 28th July 2006
