NII Holdings extends iDEN contract, posts strong Q3 results

NII Holdings Inc. (NIHD, which offers wireless services under the Nextel brand in five Latin American countries, signed a three-year extension with Motorola Inc. (MOT) for the supply of iDEN infrastructure. The deal between the two companies now runs through 2014 and covers the supply of hardware, software and services and highlights Motorola’s continued commitment to its iDEN platform.
Financial terms of the extension were not released, though it indicates that Motorola and NII Holdings plan to continue support for the iDEN platform for at least a few more years.The previous agreement, signed in 2006, extended the supply contract through next year.
The news comes just days after Sprint Nextel Corp., which has sold off most of its interest in NII Holdings, noted that its iDEN platform could eventually be turned off following plans for a network overhaul that will see some of the spectrum currently used for its iDEN operations refarmed for its more lucrative CDMA services.
NII Holdings currently serves more than 8.5 million customers across Argentina, Brazil, Chile, Mexico and Peru. Motorola added that its proprietary iDEN technology is currently being used by more than 30 network operators in 24 countries. The platform’s unique properties allows for use by carriers with complicated or defused spectrum positions and is known to provide the highest performing push-to-talk capabilities.
The carrier was recently granted a 30 megahertz spectrum license in the 1.7/2.1 GHz spectrum band from Mexico’s Ministry of Communications and Transport, which NII Holdings said it was using to deploy a 3G network over the next 18 months.
Solid Q3 results
NII Holdings also reported that it added 436,000 net subscribers to its operations during the third quarter, a 32% increase compared with the 329,500 it added during the third quarter of 2009. Boosting its solid growth was a dramatic decrease in customer churn 1.93% during the third quarter of 2009 to 1.64% this year.
The carrier also managed to grow its average revenue per user from $46 to $47, while decreasing its cost per gross customer addition from $268 to $243.
The strong customer growth and ARPU increase helped push NII Holdings’ revenues up more than 26% from $1.142 billion during the third quarter of 2009 to $1.446 billion this year. Net income also increased from $117 million in 2009, a return of 69 cents per share, to $136.3 million this year, or 79 cents per share.