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NII Holdings' CEO Discusses Q1 2012 Results - Earnings Call Transcript

In addition, during this call, we'll be discussing certain financial metrics that do not conform to Generally Accepted Accounting Principles in the U.S, or better known as GAAP. For a reconciliation of these financial metrics to GAAP, please access NII's Investor Relations link at nii.com.

I would now like to introduce Steve Dussek, our CEO. Steve?

Steven P. Dussek

Thank you, Tim. Good morning, and thank you for joining our call today.

Our results in the first quarter reflect both successes and challenges. We made progress on our key initiatives for the year, but our operating performance in some of our markets fell below our expectations. I want to give you my insight into both of these areas.

First, looking at our operating results, our net add performance was below what we wanted to accomplish in the first quarter. The factors contributing to the net add results varied somewhat from market to market, but strong competition was a common contributor across our markets. Also, the decisions we made last quarter to scale back our prepaid offering in Argentina and to delay the launch of 3G Push-to-Talk services in Peru contributed to the shortfall.

In Brazil, strong competition continues to create a difficult environment as pricing remains aggressive and the adoption of 3G devices has accelerated. This situation has made it more challenging for us to generate quality growth in the near term as we develop a broader set of services on 3G that are necessary for our long-term success.

We are changing certain policies and rate plans in order to improve our performance in Brazil. While we believe that these actions are the best approach to achieve our long-term objectives, we anticipate that the general competitive environment will continue to weigh on our results for the next several quarters.

Having said that, I would like to emphasize that we see tremendous opportunity for NII in Brazil for the long run. The investments that we are making today to deploy our advanced platform will allow us to greatly expand our product set, service capabilities and coverage in an expanding market. All of this will position us to capture higher levels of profitable growth in the future.

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