NII Holdings Posts Record Second Quarter 2008 Results

Company achieves record results for net subscriber additions, operating revenues and operating income before depreciation and amortization

RESTON, Va., July 23, 2008 -- NII Holdings, Inc. (Nasdaq: NIHD) today announced its consolidated financial results for the second quarter of 2008. For the second quarter, the Company added 394,500 net subscribers, a new quarterly record resulting in an ending subscriber base of over 5.4 million subscribers, a 34% increase over the subscriber base reported at the end of the second quarter of 2007. Financial results for the second quarter of 2008 included consolidated operating revenues of $1.1 billion, a new quarterly record representing a 40% increase over the same period last year.

Highlights:
- Company announces accelerated expansion plan in Brazil
- Net subscriber additions of 394,500 - resulting in over 5.4 million subscribers at June 30, 2008 - a 34% increase over the second quarter 2007 ending subscriber base
- Consolidated operating revenues of $1.1 billion - a 40% increase over second quarter 2007
- Consolidated operating income before depreciation and amortization of $305 million - a 47% increase over second quarter 2007
- Quarter-end consolidated cash and cash equivalents of $1.3 billion and short-term investments of $166 million

The Company reported consolidated operating income before depreciation and amortization, or OIBDA, for the second quarter of $305 million, a 47% increase over the same period last year. The Company's reported OIBDA includes the impact of approximately $17 million of non-cash stock option compensation expense compared to $13 million reported in the same period in 2007. The Company also reported consolidated operating income of $200 million, a 48% increase over the same period last year, and net income of $155 million, an 85% increase over the second quarter of 2007, or $0.93 per basic share.

"Strong demand for our high quality wireless service coupled with solid execution resulted in record results for the second quarter," said Steve Dussek, NII's Chief Executive Officer. "We generated the largest number of gross and net subscriber additions in our history, while delivering record levels of revenues and OIBDA. Compared to the second quarter of last year, we drove a 40% increase in our total revenues and a 47% increase in OIBDA, while adding 394,500 net subscribers to our network, ending the quarter with over 5.4 million subscribers, a 34% increase over our ending subscriber base a year ago. Our team is excited about the strong results that we have delivered in the first half of the year and we believe that we are on track to meet or exceed 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 second quarter, up $1 as compared to the same period last year. The Company also reported churn of 1.89% for the second quarter, up from 1.84% in the first quarter of 2008. Consolidated cost per gross subscriber addition, or CPGA, was $322 for the second quarter, a slight improvement over both the same period last year and the first quarter of 2008.

The Company made solid progress on its expansion plan during the quarter, adding 340 sites, primarily in Brazil and Mexico. Total consolidated capital expenditures were $244 million during the second quarter of 2008, largely related to investments in network capacity and geographic expansion in those markets.

The Company has announced plans to make additional investments in Brazil in order to further increase capacity to support its growth and to expand its geographic footprint, including the expansion of its network into the Northeast region of the country - an important business region in that market. As a result of this decision, the Company expects to invest an incremental $100 million in capital expenditures this year in Brazil to capture this long term growth opportunity, bringing its consolidated capital expenditure outlook for 2008 to $850 million.

"We have continued to strengthen our network during the year, increasing capacity and extending the geographic reach of our network," said Gokul Hemmady, NII's Chief Financial Officer. "Recognizing both the strong performance of our team in Brazil and the enormous opportunity in that country, we believe the time is right to make the investments to significantly increase the coverage, capacity, and value of our network in Brazil. By increasing our presence in this market, we further improve Nextel Brazil's ability to capture the long term growth opportunity that is available in the country," he added.

The Company ended the quarter with $2.34 billion in total long-term debt, consisting of $1.55 billion in convertible notes, $489 million of a syndicated loan facility and $302 million in local currency tower financing and other debt obligations. With quarter-end consolidated cash and cash equivalents of $1.3 billion and short-term investments of $166 million, the Company's net debt at the end of the second quarter was $896 million.

During the quarter, the Company purchased 2.8 million shares of its common stock at an average price of $49.50 per share for a total purchase price of $140 million. Year-to-date the Company has purchased 5.6 million shares for a total purchase price of $243 million and plans to complete its $500 million share repurchase program by the end of 2008.

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, Net Debt, and CPGA 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 second quarter 2008 results, visit the investor relations link at 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.

Source: Nextel via PRNewswire-FirstCall

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