Latin American mobile operator NII Holdings, working under the Nextel brand in Mexico, Brazil, Argentina, Peru and Chile, lost 178,000 net subscribers in the third quarter, bringing its total subscriber base to 9.73 million, versus 9.84 million at 30 September 2012. Revenue decreased by 22 percent year-on-year to USD 1.10 billion, while OIBDA plunged nearly 78 percent to 52 million, due to increasing investments related to the company's deployment of its planned next-generation networks, weaker currency exchange rates, lower ARPU on a local currency basis, and costs to migrate customers to the new network in Mexico.
For the third quarter, Nextel generated an operating loss of USD 163 million and a net loss of USD 300 million or USD 1.74 per basic share, compared to a net profit of USD 60.3 million and a net loss of USD 82.4 million in the year-earlier quarter.
Nextel CEO Steve Shindler said the company is “extremely disappointed” with its results for the quarter. In order to return to growth, the operator began implementing a set of initiatives, dubbed ‘Project Accelerate’, focused on recovering lost ground and enhancing its competitive position in its major markets. These initiatives include launching aggressive marketing campaigns and pricing plans in its core markets beginning in the fourth quarter, investing to improve coverage, and moving quickly to offer iconic smartphones, including the Samsung Galaxy S4, HTC One, Moto X and others.
Nextel said capex reached USD 231 million in the third quarter, of which USD 144 million was paid in cash. ARPU declined by nearly USD 9 to USD 31 in the quarter. Churn reached 3.59 percent, up by 105 basis points from the year earlier. The company ended the quarter with USD 5.8 billion in total long-term debt and USD 2 billion in cash and investments, resulting in net debt at USD 3.8 billion.
Nextel has also announced that it will not achieve its financial guidance for the year given the weak year-to-date operational and financial results, the continued depreciation of local currency exchange rates and the expected impact of Project Accelerate on its results for the fourth quarter. The company has not updated its guidance at this time, but expects to miss its consolidated adjusted OIBDA guidance for the year by USD 200 million or more, while remaining in line with its prior consolidated capex guidance.
