NII Holdings to Sell Tower - Analyst Blog
25 Aprile 2013 - 7:40PM
Zacks
Latin American wireless operator, NII Holdings
Inc. (NIHD) targets to sell 4,500 wireless towers by the
middle of fiscal 2013 across Brazil and Mexico. The amount to be
realized from the sale will be utilized to fund its 3G deployment
goal across these regions.
NII Holdings is planning to raise nearly $1 billion during
fiscal 2013 either through tower sale or by issuing senior notes.
After selling the towers, the company may lease them back.
At the end of the fourth quarter of 2012, NII Holdings had
$1,588.3 million in cash, cash equivalents and marketable
securities. In addition, the total debt at the end of the reported
quarter was $4,866.2 with a very high debt-to-capitalization ratio
of 0.68.
To make matters worse, Standard and Poor’s (S&P) lowered NII
Holdings’ corporate credit rating by one notch to B-, which is
close to junk status. So it will be difficult for the company to
raise enough debt from the market.
NII Holdings’s objective to cover both the highly lucrative
Brazilian and Mexican market require huge cash. These markets are
hugely dominated by America Movil S.A.B. de C.V.
(AMX) and Telefornica SA (TEF). To counter such
competition, NIHD plans to aggressively rollout its new 3G service
integrated with the Push to Talk (PTT) technology by the end of
2013.
On the flip side, America Movil started deploying 4G LTE across
these regions, which may increase customer churn for NII Holdings
going forward.
Moreover, NII Holdings is involved in the process of phasing out
Motorola Solution’s (MSI) Integrated digital
enhanced technology (iDEN) and consequently integrating its new
Push to Talk (PTT) technology, hence driving cost and delaying the
3G launch.
Thus, it is to be seen how NII Holdings survives against such
sustained headwinds without merging with any major telecom
carrier.
Currently, NII Holdings carries a Zacks Rank #3 (Hold).
AMER MOVIL-ADR (AMX): Free Stock Analysis Report
MOTOROLA SOLUTN (MSI): Free Stock Analysis Report
NII HLDGS-CL B (NIHD): Free Stock Analysis Report
TELEFONICA S.A. (TEF): Free Stock Analysis Report
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