NII slashes jobs, expects higher pre-paid losses in Mexico; Brazil tower sale complete

10 Dec 2013

US-based operator NII Holdings, which provides wireless services under the Nextel brand in Brazil, Mexico, Argentina and Chile, has disclosed further details regarding its planned realignment in connection with its recently announced ‘Project Accelerate’ initiative. The company will implement a restructuring and organisational realignment which includes reductions of over 25% of headquarter staff and the elimination of over 1,400 positions in its market operations. According to NII, this will result in a more streamlined management structure that is expected to reduce costs and improve operational efficiency while retaining the company’s focus on accelerating subscriber growth. It expects to incur cash costs related to employee severance in the range of USD25 million to USD35 million in connection with the plan, but expects to realise annualised cost savings of between USD50 million and USD55 million.

In a further move, NII has modified its customer disconnection policy for inactive pre-paid subscribers, and as such expects a higher level of pre-paid customer deactivations in Mexico than previously estimated. The firm now expects a net subscriber loss of approximately 400,000 in Mexico for the fourth quarter of 2013. ‘The structural changes we are announcing today support our accelerated growth strategy,’ commented Steve Shindler, CEO of NII Holdings, adding: ‘By realigning our business and refocusing our teams on our growth goals, we can further simplify and streamline operations, reduce costs and free up resources.’

In a separate announcement, NII has said that it has completed the sale of 1,940 communications sites in Brazil to American Tower Corporation for total proceeds of BRL813.8 million (USD350 million). As part of the transaction, Nextel Brazil agreed to lease back the sites from American Tower for a minimum twelve-year initial lease term and has the option to extend the lease for additional renewal periods.

Brazil, Mexico, United States, NII Holdings, Nextel Brasil, Nextel de Mexico,

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