StockCall Scrutinizes NII Holdings and Vodafone: Telecom Stocks Offer
LONDON, February 12, 2013
LONDON, February 12, 2013 /PRNewswire/ --
The telecom sector features immense competition, along with heavy capital
expenditure and capacity build up. Due to these constraints, only companies
with excellence managed to survive. Competition may take its toll on any
company as evidenced by NII Holdings Inc. (NASDAQ: NIHD) which is constantly
losing its market value. On the other hand, companies like Vodafone Group plc
(NYSE: VOD) has managed to stay afloat despite facing similar issues.
StockCall reviewed the solar industry and chose NII Holdings and Vodafone for
its technical coverage. These free reports can be seen for free at
NII Holdings Faces Stiff Competition
NII Holdings Inc. stock is down 15 percent this year so far. The main catalyst
behind the downward trajectory is the company's recent announcement of its
feeble outlook for FY2013. NII Holdings expects its 2013 revenue to be in the
range of $5.7 billion and $5.9 billion, lagging behind the market estimates of
$6.1 billion in annual revenue. It expects its OIBDA in the range of $600
million and $650 million. Download the free research on NII Holdings by
signing up now at
The company is mainly active in Brazil and sees stiff competition from telecom
giants like America Movil and Telefonica. Despite its collaboration with
Sprint to represent Nextel brand in Latin America, the company is struggling
to gain market share.
Other maladies affecting the company are its lower revenue per user, which
directly affects its margins. NII Holdings also plans to go ahead with its 3G
installation program. However, its rivals like America Movil are already
working on LTE infrastructure. Launch of 3G services is also expected to put
additional burden on the company's strained finances, and it is looking to
spend about a $1 billion on capital expansion this year.
However, the company plans to sell bonds to bridge the gap between funds and
its capital expenditures. NII Holdings lost about three quarters of its market
value in the past 12 months and the stock is trading near its 52-week low. The
company expects its customer-base to grow at 'mid-single digit' rate during
the year and it may have some positive impact on its stock price. If the
company is able to fix its low ARPU problem, we may see some upward movement
in the stock.
Vodafone Provides Healthy Outlook
Vodafone Group recently announced better-than-expected quarterly results.
However, its revenue for the third quarter of the year fell 2.2 percent to
$18.29 billion. While its revenue in Northern and Central Europe increased, it
saw a downfall in revenue from Africa, Asia/Pacific and Southern Europe. It
also lost subscribers in Europe. The company is also under pricing pressure.
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However, Vodafone is planning to upgrade its offerings and infrastructure. The
stock has grown 8 percent in the year so far and it offers good dividend yield
of 3.75 percent. The company is also optimistic about its future performance
as it upgraded its guidance for FY 2014. Vodafone offers a good investment
opportunity, thanks to its capital appreciation, dividend payment and generous
share buyback program.
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