NII Holdings, which has mobile operations in Latin America under the Nextel brand, said it would likely file for Chapter 11 bankruptcy protection after announcing another poor set of quarterly results.
“Despite the actions we’ve taken to improve our operational performance, we have fallen short in our efforts, leaving the company with a liquidity position that is not sufficient to support the business,” said Steve Shindler, NII Holdings’ CEO.
A bruising second quarter saw the company register a net loss of $629 million on sales of €969 million. NII Holdings had a net debt of $4.8 billion as of 30 June.
“While we have seen progress on some operational metrics, our financial performance continues to reflect the impact of the deterioration in our revenue base,” added Juan Figuereo, NII Holdings’ CFO.
A growing subscriber base in Brazil was one bright spot in the Q2 results, but the haemorrhaging of 3G customers in Mexico – a net loss of 123,000 WCDMA subscribers – is a major cause for concern.
“While our subscriber losses in Mexico were lower than last quarter, we are still short of where we need to be in that market,” admitted Shindler. “We will continue to take actions to improve our results in Mexico including the optimisation of our distribution channels and the staging of our 3G services to more effectively attract new customers.”
The group reported a net loss of 77,000 subscribers for the quarter, bringing its quarter-end subscriber base to 9.4 million, a 6 per cent decrease from a year ago.
Consolidated ARPU for the group fell from $36 to $28 over the same period, while monthly churn jumped from 2.67 per cent to 3.39 per cent.
Given the ongoing review of its strategic and restructuring options, NII Holdings decided not to host an earnings conference call for the quarter.