Nextel in talks to sell towers in Brazil, Mexico

NII Holdings said that its 3G network plans in Mexico were on schedule and that it aims to extend coverage to match its existing iDEN footprint by the end of the third quarter of 2013.
NII Holdings added that it is continuing to support its operations in Peru, Chile and Argentina, while also exploring strategic options for these markets, such as partnerships, service arrangements and asset sales to maximize the value of those businesses and generate additional liquidity.

“We think the company sent a clear message in the press release by acknowledging that Peru, Chile and Argentina are non-strategic assets and that it would not be investing in these markets,” stated Kevin Smithen and Zach Horat, analysts with Macquarie Capital. “We believe that exiting from Peru and Chile could save NII Holdings $200 million in annual [earnings before interest, taxes, depreciation and amortization].”

In fact, NII Holdings did note that it is focusing its 3G network deployment investments on Mexico and Brazil to improve results in those two core markets.
The company launched 3G services in Mexico in September. Nextel has not made an official announcement, although it quietly launched 3G data plans in Brazil in December. Macquarie Capital released a statement saying they believe interim CEO and board chairman, Steve Shindler, has chosen to accelerate 3G investments in Mexico and Brazil in order to stabilize average revenue per user and churn.

In addition, NII Holdings said it is in the process of selling and leasing back an aggregate of up to 4,500 telecommunication towers in Brazil and Mexico through a competitive bidding process. “We also believe that the tower sale is imminent and will provide significant additional liquidity. Based on our estimate there will be $744 million in proceeds at $155,000 per site,” noted the Macquarie Capital analysts.

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