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NII Holdings Subscriber Base Shrinks and Posts Q1 Financial Loss

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NII Holdings which operates Nextel branded networks across Southern America had reported that its first quarter subscriber base shrunk by 52,000, taking its down to 9.4 million customers.

Financial results for the first quarter include consolidated operating revenues of $970 million, a 27 percent decrease compared to the first quarter of 2013; consolidated adjusted OIBDA loss, which excludes the impact of non-cash asset impairments, restructuring charges and other unusual items, of $84 million; and a consolidated operating loss of $239 million.

For the first quarter 2014, the Company generated a net loss from continuing operations of $376 million. Capital expenditures were $118 million for the period.

"Our focus for 2014 is to drive better operational and financial results by stabilizing our operations in Mexico and investing in subscriber growth in Brazil," said Steve Shindler, NII Holdings' chief executive officer. "Our 3G net subscriber additions in Brazil more than doubled this quarter from the fourth quarter of 2013, but were not enough to offset the continued subscriber losses in Mexico."

NII Holdings' consolidated average monthly service revenue per subscriber (ARPU) was $29 for the first quarter of 2014, down from $39 in the prior year. The Company also reported consolidated average monthly churn of 3.42 percent for the period, compared to 2.42 percent in the first quarter of 2013. Consolidated cost per gross add (CPGA) was $290 for the first quarter 2014, a $13 increase from the year ago period.

The Company ended the first quarter with $5.9 billion in total debt and $1.7 billion in consolidated cash and short-term investments, resulting in $4.2 billion of net debt.

"Although our cash use is typically higher in the first half of the year, it was particularly high in the first quarter of 2014 due in part to the required prepayment of $135 million in annual spectrum fees in Mexico that have historically been due in the second quarter of the year. We also increased handset inventories by approximately $68 million, primarily in Mexico and Brazil, as we expanded our portfolio and prepared for the launch of iconic handsets in both markets," said Juan Figuereo NII Holdings executive vice president and chief financial officer. "With revenue generation falling short of our expectations and the need to continue to invest in subscriber growth, we are increasing the intensity of our focus on balancing investments with preserving liquidity."

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