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NII Holdings Profits Plunge as Revenues per Customer Drops

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NII Holdings which operates Nextel branded mobile networks in Latin America has reported that its first quarter revenues of US1.63 billion which are basically flat compared to a year ago.

This was despite adding 260,000 net subscribers to its network, bringing its ending subscriber base to more than 10.9 million, a 16 percent increase compared to the subscriber base as of March 31, 2011.

The discrepancy is explained by a US47 drop in the monthly ARPU to $42, driven by year-over-year weakening in average currency exchange rates and declines in local currency ARPU related to an increase in the number of customers with lower rate service plans.

Net income dropped by 89% to just USD11 million, compared to USD96.8 million a year ago.

Consolidated first quarter 2012 capital expenditures were $234 million.

"Our consolidated operating results for the first quarter reflect our progress on our key priorities that support our long-range business goals and the challenges we are facing in some of our markets. We are striving to generate the best balance of growth and profitability as we invest for our future," said Steve Dussek, NII Holdings' chief executive officer.

The company also reported churn of 2.07 percent for the first quarter, up 46 basis points from the level reported for the same period last year resulting primarily from higher churn levels in Brazil and Mexico. Consolidated cost per gross add (CPGA) was $283 for the first quarter, a $3 decrease compared to the first quarter of 2011, resulting from lower advertising and marketing expenses.

The Company ended the quarter with $4.7 billion in total debt and $2.3 billion in consolidated cash and investments, resulting in net debt of $2.4 billion.

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