NII Holdings Posts Record Results for Third Quarter 2008

Company achieves record results for operating revenues and operating income
before depreciation and amortization

RESTON, Va., Oct. 23 /PRNewswire-FirstCall/ -- NII Holdings, Inc. (Nasdaq:
NIHD) today announced its consolidated financial results for the third quarter
of 2008. For the third quarter, the Company added 394,500 net subscribers,
matching the company's quarterly record of net subscriber additions set in the
second quarter of 2008, resulting in an ending subscriber base of over 5.8
million subscribers, a 33% increase over the subscriber base reported at the
end of the third quarter of 2007. Financial results for the third quarter of
2008 included consolidated operating revenues of $1.2 billion, a new quarterly
record representing a 38% increase over the same period last year. The
Company reported consolidated operating income before depreciation and
amortization, or OIBDA, for the third quarter of $331 million, a 40% increase
over the same period last year. The Company's reported OIBDA includes the
impact of approximately $16 million of non-cash stock option compensation
expense compared to $19 million reported in the same period in 2007. The
Company also reported consolidated operating income of $219 million, a 37%
increase over the same period last year, and net income of $92 million, a 12%
increase over the third quarter of 2007, or $0.55 per basic share.
"Strong demand for our differentiated wireless service combined with solid
execution and our expanding presence in the region drove our results for the
third quarter," said Steve Dussek, NII's Chief Executive Officer. "We
generated the largest number of gross additions and matched the largest number
of net subscriber additions in our history, while delivering record levels of
revenues and OIBDA. Our team will focus on building upon the operational
momentum reflected in the strong results that we have delivered year-to-date,
and assuming average exchange rates for local currencies against the dollar do
not decline significantly from the average rates we have seen so far this
quarter, we believe we are on track to meet our guidance on subscribers,
revenue, and OIBDA for 2008," he added.
NII Holdings' average monthly service revenue per subscriber (service
ARPU) was $59 for the third quarter, consistent with the level reported in the
same period last year and during the second quarter of 2008. The Company
reported churn of 1.87% for the third quarter, down from 1.89% in the second
quarter of 2008, driven by an improvement in churn in the Mexico market.
Consolidated cost per gross subscriber addition, or CPGA, was $318 for the
third quarter, an improvement over both the same period last year and the
second quarter of 2008.
The Company continued to enhance the coverage and capacity of its network
during the quarter, adding 277 sites, primarily in Brazil and Mexico. Total
consolidated capital expenditures were $205 million during the third quarter
of 2008, largely related to investments in network capacity and geographic
expansion in those markets.
"We have continued to produce excellent financial and operating results
driven by the strong demand for our services and supported by the increased
capacity and extended geographic reach of our network," said Gokul Hemmady,
NII's Chief Financial Officer. "We have a solid balance sheet and cash
position, and our outlook remains positive as we continue to meet the
communications needs of a large and growing base of subscribers who use our
service as a necessary business tool essential to their everyday livelihood,"
he added.
The Company ended the quarter with $2.29 billion in total long-term debt,
consisting of $1.55 billion in convertible notes, $467 million in syndicated
loan facilities and $273 million in local currency tower financing and other
debt obligations. With quarter-end consolidated cash and cash equivalents of
$1.4 billion and short-term investments of $90 million, the Company's net debt
at the end of the third quarter was $808 million.
In addition to the preliminary results prepared in accordance with
accounting principles generally accepted in the United States (GAAP) provided
throughout this press release, NII has presented consolidated OIBDA, ARPU,
CPGA and Net Debt, which are non-GAAP financial measures and should be
considered in addition to, but not as substitutes for, the information
prepared in accordance with GAAP. Reconciliations from GAAP results to these
non-GAAP financial measures are provided in the notes to the attached
financial table. To view these and other reconciliations of non-GAAP financial
measures that the Company uses and information about how to access the
conference call discussing NII's third quarter 2008 results, visit the
investor relations link at http://www.nii.com.
About NII Holdings, Inc.
NII Holdings, Inc., a publicly held company based in Reston, Va., is a
leading provider of mobile communications for business customers in Latin
America. NII Holdings, Inc. has operations in Mexico, Brazil, Argentina, Peru
and Chile offering a fully integrated wireless communications tool with
digital cellular voice services, data services, wireless Internet access and
Nextel Direct Connect(R) and International Direct Connect(TM), a digital
two-way radio feature. NII Holdings, Inc., a Fortune 1000 company, trades on
the NASDAQ market under the symbol NIHD and is a member of the NASDAQ 100
Index. Visit the Company's website at http://www.nii.com.
Nextel, the Nextel logo, Nextel Online, Nextel Business Networks and
Nextel Direct Connect are trademarks and/or service marks of Nextel
Communications, Inc.
"Safe Harbor" Statement under the Private Securities Litigation Reform Act
of 1995. A number of the matters and subject areas discussed in this press
release that are not historical or current facts deal with potential future
circumstances and developments. The discussion of such matters and subject
areas is qualified by the inherent risks and uncertainties surrounding future
expectations generally, and also may materially differ from NII Holdings'
actual future experience involving any one or more of such matters and subject
areas. NII Holdings has attempted to identify, in context, certain of the
factors that it currently believes may cause actual future experience and
results to differ from NII Holdings' current expectations regarding the
relevant matter or subject area. Such risks and uncertainties include the
uncertainty relating to our ability to achieve the operating and financial
results described in our previously announced 2008 guidance, the risks and
uncertainties relating to the impact of more intense competitive conditions
and changes in economic conditions in the markets we serve, the impact on our
financial results, and potential reductions in the recorded value of our
assets, that may result from fluctuations in foreign currency exchange rates
and, in particular, fluctuations in the relative values of the currencies of
the countries in which we operate compared to the U.S. dollar, the risk that
our network technologies will not perform properly or support the services our
customers want or need including the risk that technology developments to
support our services will not be timely delivered, the risk that customers in
the markets we serve will not find our services attractive, and the
additional risks and uncertainties that are described from time to time in NII
Holdings' Annual Report on Form 10-K for the fiscal year ended December 31,
2007, which was filed on February 27, 2008, and in other reports filed from
time to time by NII Holdings with the Securities and Exchange Commission.
This press release speaks only as of its date, and NII Holdings disclaims any
duty to update the information herein.

NII HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE NINE AND THREE MONTHS ENDED SEPTEMBER 30, 2008 AND 2007
(in millions, except per share amounts, and unaudited)

Nine Months Ended Three Months Ended
September 30, September 30,
2008 2007 2008 2007
Operating revenues
Service and other
revenues $3,106.9 $2,279.3 $1,116.1 $827.5
Digital handset and
accessory revenues 173.0 76.8 66.6 26.9
3,279.9 2,356.1 1,182.7 854.4
Operating expenses
Cost of service
(exclusive of
depreciation and
amortization included
below) 848.6 609.8 305.6 223.6
Cost of digital handset
and accessory sales 455.9 320.6 162.5 112.1
Selling, general and
administrative 1,054.0 771.5 384.0 282.0
Depreciation 285.5 209.9 102.7 73.6
Amortization 25.4 7.1 8.9 3.7
2,669.4 1,918.9 963.7 695.0
Operating income 610.5 437.2 219.0 159.4
Other income (expense)
Interest expense (124.1) (89.6) (42.5) (35.6)
Interest income 53.3 45.1 16.8 22.3
Foreign currency
transaction (losses)
gains, net (16.1) 12.6 (56.4) 6.8
Debt conversion expense,
net - (26.4) - (26.4)
Other expense, net (12.8) (1.0) (7.6) (1.6)
(99.7) (59.3) (89.7) (34.5)
Income before income
tax provision 510.8 377.9 129.3 124.9
Income tax provision (150.2) (128.0) (37.5) (43.3)
Net income $ 360.6 $249.9 $ 91.8 $81.6

Net income per common
share, basic $2.16 $1.52 $0.55 $0.48
Net income per common
share, diluted $2.06 $1.40 $0.54 $0.46

Weighted average
number of common
shares outstanding,
basic 167.3 164.9 165.7 170.0
Weighted average number
of common shares
outstanding, diluted 186.2 185.1 174.4 183.6

CONSOLIDATED BALANCE SHEET DATA
(in millions)

September 30, December 31,
2008 2007
(unaudited)

Cash and cash equivalents $1,393.5 $1,370.2
Short-term investments 90.4 241.8
Accounts receivable, less allowance for
doubtful accounts of $30.6 and $20.2 529.3 438.3
Property, plant and equipment, net 2,130.1 1,853.1
Intangible assets, net 391.8 410.4
Total assets 5,761.2 5,436.7
Long-term debt, including current portion 2,384.3 2,266.5
Total liabilities 3,453.6 3,268.3
Stockholders' equity 2,307.6 2,168.4

NII HOLDINGS, INC. AND SUBSIDIARIES
OPERATING RESULTS AND METRICS
FOR THE NINE AND THREE MONTHS ENDED SEPTEMBER 30, 2008 AND 2007
(UNAUDITED)

NII Holdings, Inc.
(subscribers in thousands)

Three Months Ended
September 30,
2008 2007

Total digital subscribers (as of September 30) 5,839.3 4,387.6
Net subscriber additions 394.5 327.0
Churn (%) 1.87% 1.64%

Average monthly revenue per handset/unit in
service (ARPU) (1) $59 $59

Cost per gross add (CPGA) (1) $318 $332

Nextel Mexico
(dollars in millions, except ARPU and CPGA, and subscribers in thousands)

Nine Months Ended Three Months Ended
September 30, September 30,
2008 2007 2008 2007
Operating revenues
Service and other
revenues $1,583.2 $1,281.0 $559.1 $458.7
Digital handset and
accessory revenues 67.6 18.1 28.4 7.5
1,650.8 1,299.1 587.5 466.2
Operating expenses
Cost of service
(exclusive of
depreciation and
amortization included
below) 308.8 251.6 109.8 91.5

Cost of digital handset
and accessory sales 279.6 202.2 102.0 68.6
Selling, general and
administrative 459.9 353.7 164.7 125.4
Management fee 25.1 29.7 8.3 9.9
Depreciation and
amortization 148.7 106.8 52.6 38.6
1,222.1 944.0 437.4 334.0
Operating income $428.7 $355.1 $150.1 $132.2

Total digital subscribers
(as of September 30) 2,584.8 1,988.5
Net subscriber additions 149.1 140.1
Churn (%) 2.29% 1.86%

ARPU (1) $68 $74

CPGA (1) $422 $436

Nextel Brazil
(dollars in millions, except ARPU and CPGA, and subscribers in thousands)

Nine Months Ended Three Months Ended
September 30, September 30,
2008 2007 2008 2007

Operating revenues
Service and other
revenues $976.7 $574.3 $360.1 $217.2
Digital handset and
accessory revenues 54.9 25.2 20.0 7.4
1,031.6 599.5 380.1 224.6
Operating expenses
Cost of service
(exclusive of
depreciation and
amortization included
below) 344.3 197.1 125.7 74.7
Cost of digital
handset and accessory
sales 87.1 57.1 28.3 21.2
Selling, general and
administrative 317.5 199.7 118.6 77.2
Depreciation and
amortization 109.5 67.7 40.5 25.1
858.4 521.6 313.1 198.2
Operating income $173.2 $77.9 $67.0 $26.4

Total digital subscribers
(as of September 30) 1,675.0 1,187.5
Net subscriber additions 149.1 105.2
Churn (%) 1.34% 1.32%

ARPU (1) $64 $54

CPGA (1) $257 $293

Nextel Argentina
(dollars in millions, except ARPU and CPGA, and subscribers in thousands)

Nine Months Ended Three Months Ended
September 30, September 30,
2008 2007 2008 2007

Operating revenues
Service and other
revenues $378.4 $293.5 $137.3 $105.4
Digital handset
and accessory
revenues 36.4 24.3 13.0 8.6
414.8 317.8 150.3 114.0
Operating expenses
Cost of service
(exclusive of
depreciation and
amortization included
below) 132.8 109.8 47.5 39.3
Cost of digital handset
and accessory sales 55.4 37.9 20.0 13.1
Selling, general and
administrative 98.6 69.2 36.6 24.5
Depreciation and
amortization 28.7 22.5 10.4 7.6
315.5 239.4 114.5 84.5
Operating income $99.3 $78.4 $35.8 $29.5

Total digital subscribers
(as of September 30) 938.0 768.2
Net subscriber additions 41.1 42.3
Churn (%) 1.75% 1.51%

ARPU (1) $43 $41

CPGA (1) $212 $173

Nextel Peru
(dollars in millions, except ARPU and CPGA, and subscribers in thousands)

Nine Months Ended Three Months Ended
September 30, September 30,
2008 2007 2008 2007
Operating revenues
Service and other
revenues $163.2 $128.9 $57.6 $45.4
Digital handset and
accessory revenues 14.0 9.2 5.1 3.3
177.2 138.1 62.7 48.7
Operating expenses
Cost of service
(exclusive of
depreciation and
amortization included
below) 58.9 50.3 21.0 17.6
Cost of digital
handset and
accessory sales 32.2 22.5 11.6 8.7
Selling, general and
administrative 52.7 39.3 19.3 14.3
Depreciation and
amortization 15.1 15.2 5.2 4.3
158.9 127.3 57.1 44.9
Operating income $18.3 $10.8 $5.6 $3.8

Total digital subscribers
(as of September 30) 620.7 436.0
Net subscriber additions 51.1 37.2
Churn (%) 1.71% 1.74%

ARPU (1) $30 $34

CPGA (1) $167 $170

(1) For information regarding ARPU and CPGA, see "Non-GAAP Reconciliations
for the Nine and Three Months Ended September 30, 2008 and 2007"
included in this release.

NON-GAAP RECONCILIATIONS
FOR THE NINE AND THREE MONTHS ENDED SEPTEMBER 30, 2008 AND 2007
(UNAUDITED)

Operating Income Before Depreciation and Amortization
Consolidated operating income before depreciation and amortization, or
OIBDA, represents operating income before depreciation and amortization
expense. Consolidated OIBDA is not a measurement under accounting principles
generally accepted in the United States, may not be similar to consolidated
OIBDA measures of other companies and should be considered in addition to, but
not as a substitute for, the information contained in our statements of
operations. We believe that consolidated OIBDA provides useful information to
investors because it is an indicator of operating performance, especially in a
capital intensive industry such as ours, since it excludes items that are not
directly attributable to ongoing business operations. Our consolidated OIBDA
calculations are commonly used as some of the bases for investors, analysts
and credit rating agencies to evaluate and compare the periodic and future
operating performance and value of companies within the wireless
telecommunications industry. Consolidated OIBDA can be reconciled to our
consolidated statements of operations as follows (in millions):

NII Holdings, Inc.

Three Months Ended
September 30,
2008 2007

Consolidated operating income $219.0 $159.4
Consolidated depreciation 102.7 73.6
Consolidated amortization 8.9 3.7
Consolidated operating income before
depreciation and amortization $330.6 $236.7

Average Monthly Revenue Per Handset/Unit in Service (ARPU)
Average monthly revenue per handset/unit in service, or ARPU, is an
industry term that measures service revenues, which we refer to as subscriber
revenues, per period from our customers divided by the weighted average number
of handsets in commercial service during that period. ARPU is not a
measurement under accounting principles generally accepted in the United
States, may not be similar to ARPU measures of other companies and should be
considered in addition, but not as a substitute for, the information contained
in our statements of operations. We believe that ARPU provides useful
information concerning the appeal of our rate plans and service offerings and
our performance in attracting and retaining high value customers. Other
revenue includes revenues for such services as roaming, handset maintenance,
cancellation fees, analog and other. ARPU can be calculated and reconciled to
our consolidated statement of operations as follows (in millions, except
ARPU):

NII Holdings, Inc.

Three Months Ended
September 30,
2008 2007

Consolidated service and other revenues $ 1,116.1 $827.5
Less: consolidated analog revenues (1.3) (1.5)
Less: consolidated other revenues (122.1) (84.7)
Total consolidated subscriber revenues $992.7 $741.3

ARPU calculated with subscriber revenues $59 $59

ARPU calculated with service and other revenues $66 $65

Nextel Mexico

Three Months Ended
September 30,
2008 2007

Service and other revenues $559.1 $458.7
Less: analog revenues (0.5) (0.7)
Less: other revenues (44.7) (34.4)
Total subscriber revenues $513.9 $423.6

ARPU calculated with subscriber revenues $68 $74

ARPU calculated with service and other revenues $74 $80

Nextel Brazil

Three Months Ended
September 30,
2008 2007

Service and other revenues $360.1 $217.2
Less: analog revenues (0.7) (0.6)
Less: other revenues (53.6) (33.3)
Total subscriber revenues $305.8 $183.3

ARPU calculated with subscriber revenues $64 $54

ARPU calculated with service and other revenues $75 $64

Nextel Argentina

Three Months Ended
September 30,
2008 2007

Service and other revenues $137.3 $105.4
Less: other revenues (19.2) (14.2)
Total subscriber revenues $118.1 $91.2

ARPU calculated with subscriber revenues $43 $41

ARPU calculated with service and other revenues $50 $47

Nextel Peru

Three Months Ended
September 30,
2008 2007

Service and other revenues $57.6 $45.4
Less: other revenues (4.6) (3.0)
Total subscriber revenues $53.0 $42.4

ARPU calculated with subscriber revenues $30 $34

ARPU calculated with service and other revenues $32 $36

Cost per Gross Add (CPGA)
Cost per gross add, or CPGA, is an industry term that is calculated by
dividing our selling, marketing and handset and accessory subsidy costs,
excluding costs unrelated to initial customer acquisition, by our new
subscribers during the period, or gross adds. CPGA is not a measurement under
accounting principles generally accepted in the United States, may not be
similar to CPGA measures of other companies and should be considered in
addition, but not as a substitute for, the information contained in our
statements of operations. We believe CPGA is a measure of the relative cost
of customer acquisition. CPGA can be calculated and reconciled to our
consolidated statements of operations as follows (in millions, except CPGA):

NII Holdings, Inc.

Three Months Ended
September 30,
2008 2007

Consolidated digital handset and accessory
revenues $ 66.6 $ 26.9
Less: consolidated uninsured replacement revenues (4.3) -
Consolidated digital handset and accessory
revenues, net 62.3 26.9
Less: consolidated cost of handset and accessory
sales 162.5 112.1
Consolidated handset subsidy costs 100.2 85.2
Consolidated selling and marketing 158.1 115.6
Costs per statement of operations 258.3 200.8
Less: consolidated costs unrelated to initial
customer acquisition (31.1) (23.0)
Customer acquisition costs $227.2 $177.8

Cost per Gross Add $318 $332

Nextel Mexico

Three Months Ended
September 30,
2008 2007

Digital handset and accessory revenues $ 28.4 $7.5
Less: uninsured replacement revenues (2.7) -
Digital handset and accessory revenues, net 25.7 7.5
Less: cost of handset and accessory sales 102.0 68.6
Handset subsidy costs 76.3 61.1
Selling and marketing 87.5 66.2
Costs per statement of operations 163.8 127.3
Less: costs unrelated to initial customer
acquisition (28.0) (19.7)
Customer acquisition costs $135.8 $107.6

Cost per Gross Add $422 $436

Nextel Brazil

Three Months Ended
September 30,
2008 2007

Digital handset and accessory revenues $ 20.0 $7.4
Less: uninsured replacement revenues (1.5) -
Digital handset and accessory revenues, net 18.5 7.4
Less: cost of handset and accessory sales 28.3 21.2
Handset subsidy costs 9.8 13.8
Selling and marketing 46.7 32.3
Costs per statement of operations 56.5 46.1
Less: costs unrelated to initial customer
acquisition (1.8) (2.1)
Customer acquisition costs $ 54.7 $44.0

Cost per Gross Add $257 $293

Nextel Argentina

Three Months Ended
September 30,
2008 2007

Digital handset and accessory revenues, net $13.0 $8.6
Less: cost of handset and accessory sales 20.0 13.1
Handset subsidy costs 7.0 4.5
Selling and marketing 12.9 9.0
Costs per statement of operations 19.9 13.5
Less: costs unrelated to initial customer
acquisition (0.9) (0.3)
Customer acquisition costs $19.0 $ 13.2

Cost per Gross Add $212 $173

Nextel Peru

Three Months Ended
September 30,
2008 2007

Digital handset and accessory revenues, net $5.1 $3.3
Less: cost of handset and accessory sales 11.6 8.7
Handset subsidy costs 6.5 5.4
Selling and marketing 8.3 5.6
Costs per statement of operations 14.8 11.0
Less: costs unrelated to initial customer
acquisition (1.0) (0.9)
Customer acquisition costs $ 13.8 $ 10.1

Cost per Gross Add $167 $170

Net Debt
Net debt represents total long-term debt less cash, cash equivalents and
short-term investments. Net debt to consolidated operating income before
depreciation and amortization represents net debt divided by consolidated
operating income before depreciation and amortization. Prior to 2008, we
calculated net debt as total long-term debt less cash and cash equivalents.
In 2008, we added short-term investments to the items subtracted from
long-term debt to calculate net debt because we concluded that our short-term
investments were similar to cash and cash equivalents in terms of liquidity
and should be used similarly in providing the assessment of our overall
leverage in the net debt calculation. Net debt is not a measurement under
accounting principles generally accepted in the United States, may not be
similar to net debt measures of other companies and should be considered in
addition to, but not as a substitute for, the information contained in our
balance sheets. We believe that net debt and net debt to consolidated
operating income before depreciation and amortization provide useful
information concerning our liquidity and leverage. Net debt as of September
30, 2008 can be calculated as follows (in millions):

NII Holdings, Inc.

Total long-term debt $2,291.6
Less: cash and cash equivalents (1,393.5)
Less: short-term investments (90.4)
Net debt $807.7

Contacts:
Investor Relations: Tim Perrott
(703) 390-5113
tim.perrott@nii.com

Media Relations: Claudia E. Restrepo
(786) 251-7020
claudia.restrepo@nii.com

SOURCE NII Holdings, Inc.

Investors, Tim Perrott, +1-703-390-5113, tim.perrott@nii.com, or Media,
Claudia E. Restrepo, +1-786-251-7020, claudia.restrepo@nii.com, both for NII
Holdings, Inc.