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Talinec Holdings Ltd: Neutral on NII Holdings - Analyst Blog l Docstoc

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message 1: by Eunicehagar (new)

Eunicehagar | 2 comments Mod

NII Holdings, Inc. , ( NIHD ) has recently declared dismal second-quarter 2012 results where both its top and bottom lines fell short of the Zacks Consensus Estimates.
NII Holdings reported weak subscriber addition during the second quarter of fiscal 2012 coupled with lower Average Revenue per Subscriber (ARPU) and higher churn rate. Delay in the launch of 3G services and reduction of customer retention cost has resulted in such disapointing results.
NII Holding's leverage ratio has also increased from 0.50 in 2010 to 0.61 in 2011, indicating its higher dependency on debt financing. We believe that the company will issue more such senior notes in the upcoming quarters to fund their newly launched 3G networks across all its markets as well as take part in spectrum auction, which in turn, will further increase its leverage ratio.
Lack of funds may be a constraint for the company to take part in future spectrum auction, which will be held in Argentina and other Latin American countries in the near future.
NII Holdings continues to face stiff competition from America Movil ( AMX ), which has already completed rolling out 3G services in Mexico and the major cities of Brazil and also has plans to roll out its first 4G/LTE service in Mexico from September, 2012 onwards, thereby causing more problems for the company going forward.
Despite such headwinds, the company is continuously maintaining a stable subscriber growth. It has already received strong response from its 3G service launch in Peru and Chile. Moreover, to boost its ARPU growth as well as offer value added services to its subscribers, the company also added 12 new smartphones supporting 3G technology.We, thus, maintain our long-term Neutral recommendation on NII Holdings, Inc.
Currently, NII Holdings, Inc. has a Zacks #3 Rank, implying a short-term Hold rating on the stock.

Read more: http://community.nasdaq.com/News/2012...

message 2: by Eunicehagar (new)

Eunicehagar | 2 comments Mod
really informative blog thanks for sharing and keep posting.

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