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NII Holdings Inc. Message Board

  • kitchensinkquarter kitchensinkquarter Feb 1, 2013 12:34 PM Flag

    S+P cuts NII Holdings rating!

    "The downgrade of Reston, Va.-based NII follows the company's weak operating
    and financial results in the second quarter of 2012, which were below our
    expectations, and its lower guidance for full year 2012. During the quarter,
    total revenue and EBITDA declined 15% and 56%, respectively, from the
    prior-year period. Increased competitive pressures, especially in Brazil, and
    depreciating local currencies caused NII's average revenue per user (ARPU) to
    fall by over 25% compared to the prior-year period. The Brazilian real and
    Mexican peso declined 23% and 15%, respectively, from the year-ago period,
    relative to the U.S. dollar. These factors, coupled with expenses related to
    the deployment of 3G services in Mexico and Brazil contributed to the sharp
    decline in EBITDA. ....

    we expect competition from larger wireless operators to result in higher churn despite the company's
    efforts to retain its customer base and implement tighter credit policies. ...

    The ratings on NII reflect a "weak" business risk profile and a "highly
    leveraged" financial risk profile. Key business risk factors include a
    competitive wireless industry conditions, and exposure to country risk in its
    key markets, including regulatory, economic, and foreign exchange risks. These
    factors have contributed to declining ARPU in NII's markets. Moreover, the
    company faces some technology risk because of its partial dependence on
    Motorola Inc.'s integrated digital enhanced network (iDEN) technology, which
    is being phased out over time. Tempering business risk factors include NII's
    niche business focused on corporate customers, some geographic diversity, and
    our expectation for continued subscriber growth despite slowing customer

    Sentiment: Strong Sell

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3.73+0.14(+3.90%)Feb 12 4:00 PMEST