StockCall Scrutinizes NII Holdings and Vodafone: Telecom Stocks Offer Long-Term Opportunity
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. Register for today’s free analysis on Vodafone at
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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