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NII Holdings - Revenues and Profits Hit Record Levels

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NII Holdings, the Latin American iDEN specialist, has matched the record customer intake seen in Q2, adding 395k subscribers to take its total to 5.84m. This compares with 4.39m one year earlier and 3.19m in Q3 06. The company operates five networks in Argentina, Mexico, Peru, Brazil and Chile the first three of which offer services that are directly competitive with the local cellular operators.

Together, these markets account for 3.1m of the total base, with all but 21k of the remaining 1.7m being in Brazil. Quarterly revenue exceeded $1.1bn, while operating profit, at $219.0m was 10% ahead of the $199.7m seen in Q2. Both numbers are new records, as was the $330m recorded at the EBITDA level. The nine months to date has generated revenues of $3.11bn, EBITDA of $921m and operating profits of $610.5m, all of which are new records.

NII only gives details of four of its operations - the companies in Argentina, Brazil, Mexico and Peru - but all four have contributed to growth. Revenues in Mexico are up 22% from $459m to $559m, while operating profits are up from $132m to $150m, an increase of 13.6%. Brazil has grown revenues by 65%, from $217m to $360m and this has allowed profits to jump by more than 150% from $26.4m to $67.0m. Revenues in Argentina have risen by over 30% to $137.3m and profits, by 21% to $35.8m, while Peru has reported a 27% rise in revenues to $57.6m, which has had a disproportionately beneficial impact on profits, which are up 47% at $5.6m.

Looking at ARPUs, it becomes clear that this is a rather special business. The level of spend on these networks is materially higher than that on their competitors' with the lowest ARPU - in Peru, $30 - being three times the level generated at Telefonica's Peruvian subsidiary. Elsewhere, ARPUs have slipped in Mexico, from $74 to $68 but are up in both Brazil ($54 to $64) and Argentina ($41 to $34) such that the group average has been maintained at $59. This is as high - if not higher - than the contract spend of most US customers. NII's management notes that the "outlook remains positive as we continue to meet the communications needs of a large and growing base of subscribers who use our service as a necessary business tool essential to their everyday livelihood." Quite.


NII: Venture Customers, EOP, Q1 06 – Q3 08

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Tags: arpu  rsa  telefonica  iden  Argentina  Brazil  Mexico  Peru