Last week brought rumours that NII Holdings is considering selling its Nextel business in Brazil, but comments made by the company’s CEO suggest it could be little more than speculation.
Reuters cited unnamed sources as saying that NII has held talks with investment banks in recent weeks regarding hiring a financial advisor to help it explore its options for Nextel Brasil, including a possible sale.
However, the newswire also spoke to Nextel Brazil CEO Francisco Valim, who denied that NII has plans to sell the business in the short term and said it is often in touch with banks on financial and strategic matters.
He added that the firm is looking for a buyer for its towers business. A towers sale would help it cut operating costs, improve profitability and free up cash, he said.
Valim became chief executive of Nextel Brasil in late August. At the time, NII Holdings chief executive Steve Shindler explained that the telco is keen to build up its customer base, grow revenues and reduce costs.
NII Holdings’ mobile operations in Latin America now solely consist of its Nextel units in Brazil and Argentina, although it is keen to sell out of the latter.
In September it brokered a US$178 million deal to sell 49% of Nextel Argentina to Grupo Clarin, with an option to buy the remaining 51%, but Argentina’s Autoridad Federal de las Tecnologías de la Información y las Comunicaciones (AFTIC) blocked the sale, arguing that NII had not secured the required regulatory authorisation.
While it seems likely that NII will make another move to sell the Argentina business, it may have more reason to hold on to its Brazilian operations.
Nextel is Brazil’s fifth largest mobile operator with a market share of less than 1%, according to Anatel, but growth in its 3G customer base provided a small ray of hope in otherwise dismal second-quarter results for NII Holdings.
