NII Holdings, which operates in Latin America under the Nextel brand, posted a rough 2013, with the company reporting losses in both subscribers and revenue.
“We are clearly disappointed with our operational performance in 2013, and we are taking actions to improve our business results, including the launch of Project Accelerate, a program designed to build the foundation for growth as we use our 3G networks to drive operational improvements in 2014,” said Steve Shindler, NII Holdings’ CEO, in a statement.
Financial results for the full year of 2013 included consolidated operating revenues of $4.8 billion, a 17% decrease compared to 2012; consolidated adjusted OIBDA, which excludes the impact of non-cash asset impairments, restructuring charges and other unusual items, of $324 million, a 66% decrease compared to 2012; and a consolidated operating loss of $511 million. For the full year 2013, the company generated a net loss from continuing operations of $1.6 billion.
NII Holdings ended last year with a net loss of 213,000 subscribers, bringing its year-end subscriber base to 9.5 million, a 2% decrease from a year ago.
In an attempt to reverse its fortunes, NII Holdings presented its Project Accelerate, which consists of a plan for growth in 2014 and beyond. The plan includes marketing campaigns, pricing plans as well as offering smartphones desired by target customers. Also, the company said it plans to deploy LTE in select cities in Mexico and Brazil. NII Holdings expects to realize $59 million in annualized savings.
Despite having unveiled this plan, local reports said that NII Holdings could sell its Brazil and Mexico operations. In Mexico, Telefónica is said to be a potential buyer.
Ready for the World Cup? Less than 100 days before the beginning of the FIFA World Cup games in Brazil, Infonetics Research released a report stating that the country is not mobile-ready for the big event. The market research firm noted that Brazil’s mobile infrastructure is modest in size with a total of just 60,000 base transceiver stations at the beginning of last year — AT&T alone has roughly this many BTS in the United States.
To better understand why Infonetics Research came to this conclusion, RCR Wireless News spoke with Stéphane Téral, Infonetics’ principal analyst for mobile infrastructure and carrier economics.
RCR Wireless News: The carriers met Anatel’s LTE coverage goals for the FIFA games. Do you think those goals were not enough? Should Anatel have pushed harder?
Stéphane Téral: Yes, the carriers did, but they were forced to deploy LTE in the middle of their major 3G upgrades, so they did not like it. Also, it’s LTE at 2.6 GHz, which is not good for coverage, and there is a lack of affordable LTE devices, one more reason to really push 3G.
RCR Wireless News: Is the lack of base transceiver stations the major problem for providing good wireless coverage for the FIFA World Cup games? How many BTS do you think would be best?
Stéphane Téral: Coverage will be good in the stadiums because they have installed distributed antenna systems (DAS), but it’s outside the stadiums that 3G services will suck. No one can easily add new BTS due to the number of different jurisdictions you have to go through. You have to more than double the BTS number to reach adequate 2.6 GHZ coverage.
RCR Wireless News: What do you think about stadium coverage with DAS and carriers’ offloading strategies? They complain they do not have enough time to deploy infrastructure properly.
Stéphane Téral: DAS is fantastic and will be ready. This is the best way to blast coverage in stadiums.
RCR Wireless News: In Brazil, we had the impression that LTE coverage was added to please foreign visitors, since there are few LTE customers in Brazil. (It’s still very expensive to have an LTE plan and phone.) However, the frequency band of could be an issue. Did you evaluate this?
Stéphane Téral: Absolutely, as I said, 2.6 GHz is very poor coverage. It would have been much better to roll out LTE in 700 MHz like in the U.S., but the band is not available yet.
RCR Wireless News: That said, 3G coverage, signaling and service quality are pretty bad currently. What should carriers do to improve service to meet the high expectations of FIFA World Cup travelers?
Stéphane Téral: They are all working on this by deploying 3G BTS as fast as they can and implementing optimization tools. But again asking them to start LTE roll outs while they were busy upgrading to 3G was a mistake.
Mobile market in Mexico: Mexico’s telecommunications sector grew 3.4% in the fourth quarter of 2013 compared to the fourth quarter of 2012, according to the Telecommunications Sector Production Index. Growth was above that of the Mexican gross domestic product, which grew .7% in the last quarter of 2013. In the mobile space, 393,000 mobile subscriptions were added between September and December, representing a 3.9% increase over the same period of 2012. The total connection base reached 103.6 million subscriptions, representing a penetration of 87 subscriptions per 100 inhabitants. The majority of lines were prepaid (84.6%).
Mobile broadband increased 46.6% in the fourth quarter of 2013, in a year-over-year comparison, totaling 16.6 million by the end of 2013 — 12.42 million connections used cellphones to access Internet broadband, while 4.14 million were via mobile modems.
LTE in 700 MHz: Chilean telecom regulator Subtel has defined the frequency bands for Entel, Claro and Movistar to deploy LTE networks. The carriers will have 24 months to deploy nationwide networks, expanding coverage of LTE mobile broadband services. They will have 18 months to cover 1,281 isolated locations, and provide connectivity to 503 schools and 13 routes in the country.
Other auction stipulations include facilitating retail plans for mobile virtual network operations and providing interconnection offers for national automatic roaming.
Brazil’s broadband: Internet broadband accesses in Brazil have jumped from 64.3 million in January 2012 to 137 million in January of this year. According to the TeleBrasil association, 114.6 million were mobile connections, of which 99.2 million connections were smartphones and 15.4 million were data terminals such as modems and machine-to-machine devices.
Mobile Internet broadband coverage grew by 6%, reaching 170 new municipalities over the past 12 months. Currently, 3G networks cover 3,499 municipalities where 90% of Brazilians live.
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