Monthly Archives: April 2009

NII Holdings Q1 Results – P&L Belies Underlying Strength

NII Holdings, the iDEN operator with subsidiaries in Argentina, Brazil, Chile, Mexico and Peru has reported Q1 numbers. These show a 3% year-on-year drop in revenues to $961m and a 14% decline in EBITDA, to $245m. The year-on-year comparatives get worse as we move down the P&L, with the operating results down 20.6%, the pre-tax down 29.1% while the after tax is off a third, at $70.6m. These numbers represent a real turnaround from previous NII figures – but it would be wrong to think this indicated any deterioration in the business. The drop in the figures is a direct result of the sharp drop in the value of the currencies of those countries where NII operates, compared to the US dollar in which it draws up its accounts. In constant currency terms, revenues were up 23% and EBITDA 34%.

Click to enlarge

Quarterly Operating Revenues, Actual/Normalised
Nextel International now has 6.5m customers connected to its five national networks. Over the last year, Mexico has grown from 2.27m to 2.82m, Brazil from 1.396m to 1.939m, Argentina from 851k to 978k, Peru from 521k to 704k and Chile from 12k to 29k. This last obviously recorded the greatest proportionate increase – of 141% – but all the businesses managed double digit gains, with Brazil and Peru both exceeding 35%.

ARPUs reflect the collapse of local currencies. In Mexico, the level of spend fell from $68 to $47, a drop of 31%, while there were reductions of 26% in Brazil, 19% in Peru and 8% in Argentina. The way that NII calculates these numbers makes it impossible to reverse engineer the figures to produce precise local currency ARPUs, but Peru and Mexico were about 8% down, while Brazil was little changed and Argentina nearly 5% ahead. According to NII, constant currency ARPUs were down 6% overall, which coheres with these indications.

Just before it published these numbers, NII announced a reduction in its target for net adds in 2009, from 1.275-1.350m to 1.1-1.2m. However, it has not revised its revenue or EBITDA targets, which remain in the range of $4.1-4.3bn and $1.0-1.1bn respectively. This confidence is encouraging and reflects the underlying strength of this specialist business.

http://www.cellular-news.com/story/37266.php

Chile’s preschool education goes digital

Chilean preschoolers will soon learn to use computers while
they learn to read as part of a new campaign to integrate digital technology into Chile’s school system. The Ministry gave six educational software programs to the country’s preschools to mark the launch of the campaign on Tuesday.

http://www.santiagotimes.cl/santiagotimes/index.php/news/education/chile-s-preschool-education-goes-digital.html

America Movil 1Q net profit rises as financing costs fall; obtains USD1 billion loan from China Development Bank

Mexican telecoms giant America Movil has revealed its financial results for the three months ended 31 March 2009, posting an 18.7% rise in net income to MXN16.35 billion (USD1.15 billion). The company attributed the growth to a reduction in its financing costs coupled with an increase in operating profits; operating income totalled MXN26.9 billion for 1Q 2009, 13.2% more than a year before, as depreciation and amortisation charges declined from 14.3% to 13.6% of service revenues and earnings before interest, tax, depreciation and amortisation (EBITDA) rose 12.9%, to MXN38.3 billion. Revenue also improved against the same period a year earlier, rising 15.4% to MXN93.8 billion, on the back of continued subscriber growth and increases in data revenues and post-paid contract numbers.
The group added 3.9 million subscribers over the three-month period, bringing its total to 186.6 million. The company’s US-based subsidiary Tracfone, along with its operations in Ecuador, Chile, Paraguay, Nicaragua and the Caribbean, all recorded higher subscriber gains compared to the same period in 2008. Mexico led the way in terms of net additions with 1.2 million, followed by Brazil with 855,000.
The company also revealed that it had obtained a USD1 billion, ten-year loan from China Development Bank, the first by the lender to a Mexican corporate; the funds are expected to be used to finance the acquisition of network equipment.

http://www.telegeography.com/cu/article.php?article_id=28207

WiMAX Forum Reports 13 New Networks Announced in April

The WiMAX Forum has started publishing a monthly report on network developments and statistics. The first issue notes that approximately 13 new WiMAX network deployments were announced in April. Currently, the WiMAX Forum tracks a total of 468 WiMAX deployments in 139 countries.

“The WiMAX Forum is committed to helping the global community understand the progress of the WiMAX ecosystem by sharing relevant information regarding the WiMAX Forum Certified Program, global WiMAX deployments and other milestones,” said XJ Wang, Senior Director of Marketing for the WiMAX Forum. “This monthly report is another way the WiMAX Forum educates the market and informs membership about continued WiMAX momentum.”

WiMAX Forum research showed that WiMAX deployments cover more than 430 Million POPs worldwide, and are forecasted to reach 800 Million POPs by the end of 2010.

The Iranian Communications Regulatory Authority granted four six-year licenses for operators to offer fixed WiMAX services in Iran. Also, the Chilean government announced that it had awarded a license for 30 MHz of spectrum in the 2.3 GHz band to INVERCA Telecommunications.

In Q1 2009, the WiMAX Forum Network Operators Task Force conducted a survey of over 70 WiMAX operators. In response to a question on the importance of certification, 89% of respondents indicated that their companies would require WiMAX Forum Certification for devices. Also, 74% of respondents to a question on sales channels plan to sell WiMAX devices through general retail stores.

This WiMAX Forum Industry Research Report will be available on the WiMAX Forum website the first week of every month at www.wimaxforum.org

http://www.cellular-news.com/story/37210.php

Telefonica Chile posts 17.1% rise in Q1 profit

Chilean fixed line telco Telefonica Chile has posted a net profit of CLP11.6 billion (USD19.8 million) in the first three months of 2009, a 17.1% increase on the same period of 2008. The company reported a 14.4% increase in income from broadband services to CLP30.8 billion, a 23.2% increase in pay TV revenues to CLP11 billion and a 5.6% rise in voice telephony plans to CLP35.1 billion. Broadband accounted for 17% of total income in the quarter, compared to 15% a year prior.

http://www.telegeography.com/cu/article.php?article_id=28156

NII Holdings: Capex to be cut, but Peru 3G launch still on course – Regional

Despite a cut in projected capex for 2009, Latin American digital trunking operator NII Holdings (Nasdaq: NIHD) still plans to launch a 3G service in its Peruvian operation this year, NII’s CFO Gokul Hemmady said during a conference call with investors to discuss the company’s Q1 results.

NII said on Thursday it was reducing its 2009 capital expenditure outlook to a range of US$750mn-800mn, down from its previous guidance of US$800mn-850mn, primarily due to its revised outlook for net subscriber additions. The cut will affect Mexico and Argentina, but not Peru.

"In Peru we expect to have the regulatory launch shortly, and launch commercially by the end of this year. We’re not reducing our capex for 3G in Peru," Hemmady said.

Due to incremental costs in Peru, however, the executive said the initial estimate of US$10mn in operating costs will likely increase to US$15mn-20mn by the end of the year.

OTHER SPECTRUM AUCTIONS

Referring to potential participation in spectrum auctions in other countries, Hemmady said the company is prepared to evaluate participation in 3G auctions slated for Mexico, Brazil and Chile, though time lines for the launch of auctions in the first two countries are still up in the air.

Mexico has repeatedly put off the date for a 3G spectrum auction, whereas Chile has set down a specific calendar: bidding rules will be on sale from April 16 to June 30 and reception and opening of bids will take place on July 15.

Regarding Chile, NII’s executive chair Steve Shindler said: "Like any other country where we operate, we will look very carefully at rules and expectations of what spectrum might be available and what we might be able to do with it, and use the same disciplined approach that we have in all the other markets."

"So if we think that there’s a spectrum band available to us at a reasonable price that could provide us with incremental value down the road, and all the other factors… in terms of availability of funding, we would be interested in taking a look," Shindler said.

On Brazil, Shindler said, "we’re looking to take the same approach. They tend to auction things off in regions but we would intend to sign up in all the available regions and evaluate each one as they proceed through the auction process, with the goal of having a nationwide footprint."

 

Caribbean & Latin America – CDMA Enters its “Sunset” Phase

?The technology story in the Caribbean & Latin America (CALA) region is simple: most US based technologies are in full retreat, while the international GSM/W-CDMA standards are proliferating. During the quarter, the number of customers connected to AMPS, TDMA and CDMA systems declined by 4.4m overall, bringing the number of disconnections so far this year to 19.9m, or 5.2% of the starting base.

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TDMA has been hardest hit, proportionately, as the number of customers using the technology collapsed, from over 10m to not much more than 2.5m – an overall decline of 73%. The AMPS technology that was originally deployed in most of these markets has been in decline for years and we estimate that over the course of this year, more than half of the remaining users disconnected, leaving a rump of not much more than 60k, mainly in rural and remote areas of the continent.

CDMA networks experienced the largest drop in absolute terms. It is only two years since Vivo began selling GSM handsets in Brazil, but over that time, the number of CDMA connections has dropped from 64.9m (of which 26.0m were in Brazil) to 41.7m. The disconnection rate appears to be accelerating slightly, the quarterly average increasing from 2.7m per quarter during 2007 to 3.1m per quarter in 08. Brazil, obviously, is not the only market where the technology is in retreat, with similar – or steeper – declines being seen in Argentina, Chile, Colombia, Ecuador and Peru. Only Venezuela has seen an increase in users over the year but following CANTV’s decision to move to GSM, that is unlikely to be repeated in 09.

GSM has, predictably, been the main beneficiary. The range of low priced handsets available for this technology gives it a material advantage and over the year, it added a further 87m users, which took the regional total GSM base past 400m. GSM, of course, faces a growing “challenge” from its own 3G variant, W-CDMA. This first became available in Q2 07 although the overall base has reached just 5.3m (of which 4.9m were added in 2008).

http://www.itu.int/ITU-D/ict/newslog/Caribbean+Latin+America+CDMA+Enters+Its+Sunset+Phase.aspx

Chile to get number portability by the end of 2010

According to comments made by the Minister of Transportation and Telecommunications, Rene Cortazar, which were cited by local newspaper El Mercurio, Chile plans to launch fixed and mobile number portability in the second half of 2010. Telecompaper states that unofficial estimates put the fee per ported number to be in the range CLP10 (USD0.02) to CLP15, while mobile operators are expected to invest over USD100 million to implement the portability system.

Chile to introduce number portability system in H2′10

www.WirelessFederation.com/news: Chile intends the number portability system across the nation in H2′10, says country’s ministry of transport and telecommunications Rene Cortazar. It is anticipated that the fee per number ported will range between CLP 10 and CLP 15, whereas the operators plan to invest more than 100 million to implement the portability system.