Businessmodel of NII Holdings

Customer Segments

NII Holdings provides a broad range of wireless communication services under the Nextel brand. Despite being headquartered in the US, NII Holdings exclusively serves customers in Brazil.

NII Holdings serves the general consumer market, notably users of wireless internet, mobile network services, and other communications services. It also provides services that are tailored to suit the needs of business customers. For this reason, the Company concentrates its communications services in major urban and suburban centres with high population densities and related transportation corridors that host a significant portion of Brazil’s business users and economic activity, notably Rio de Janeiro and São Paulo.

NII Holdings additionally provides business solutions, such as security, workforce management, logistics support and other applications that support its various commercial and corporate customers, including companies operating across multiple business sectors.

Value Propositions

NII Holdings provides value to its customers in the following ways:

• The quality and reliability of its services, with the Company providing high-quality and reliable communications services to its customers, operating an extensive communications infrastructure across Brazil;
• Its broad portfolio of services, with the Company offering a broad range of products and services, including its core mobile and wireless communications services, as well as various business solutions, such as workforce management, security, and logistics support;
• Its technology-backed solutions, with the Company utilising a range of cutting edge technologies in its services and solutions, and working with mobile device suppliers to ensure the quality of its services;
• Its accessibility, with the Company providing its services through multiple channels, including online sales and service channels and mobile apps; and
• Its industry expertise and experience, with the Company employing specialist technical personnel, led by a team of experienced industry executives. ### Channels

NII Holdings operates a website at www.nii.com, through which it provides information on its various services, solutions, and activities. The Company also operates a website at www.nextel.com.br which provides more detail on its Nextel-branded communications services in Brazil. The Company’s Nextel website also serves as an online sales portal, through which customers can purchase plans and devices, manage their accounts, and pay bills.

NII Holdings primarily sells its products and services directly to customers through various channels. This includes a network of retail outlets and shopping centre kiosks across Brazil, through which the Company employs dedicated sales representatives. The Company also employs various direct sales representatives and indirect sales agents, who market the Company’s services directly to potential and existing customers, and employs a dedicated team of sales and service professionals that provide the Company’s range of business solutions.

Customer Relationships

NII Holdings provides a range of services and products to customers on a self-service basis through its online store and customer portal. These digital channels allow customers to purchase devices, select mobile plans, manage their customer accounts, and pay bills without interacting directly with members of the Company’s sales and service personnel.

NII Holdings provides personalised services and assistance to customers through its network of retail outlets and shopping centre kiosks, with sales personnel able to consult directly with customers in order to identify the most appropriate products and services for their individual circumstances. Customers are also able obtain personalised assistance from the Company’s other direct and indirect sales agents.

NII Holdings provides ongoing support to its customers. Customers can contact dedicated support staff over the phone, online, and in-store in order to receive personalised responses to queries, enquiries, and complaints. The Company also provides a range of online resources to customers in the form of FAQs, guides, and technical information.

NII Holdings’s Nextel brand operates a number of social media accounts – including with Facebook, Twitter, Google+, and YouTube – through which the Company can keep its customers updated with company developments and interact directly with customers.

Key Activities

NII Holdings functions as a holding company. The Company operates through one single operating segments. It principally serves customers through its main subsidiary company, Nextel Telecomunicacoes Ltda, which provides wireless and mobile communication services – including mobile telephone voice service, wireless data services, and voice and data roaming services – under the Nextel brand in Brazil. It also offers long-term evolution services and provides services on its integrated digital enhanced network throughout various regions in Brazil.

The Company concentrates its service offerings in urban and suburban centres across Brazil, primarily major cities Rio de Janeiro and Sao Paulo. The Company additionally offers various business solutions to commercial customers, including security, workforce management, and logistics support.

Key Partners

NII Holdings, and its principal Nextel operating unit, works closely with a broad network of partner companies and organisations that support its core communications operations. These partners can be organised broadly into the following categories:

• Supplier and Vendor Partners, including suppliers of equipment, tools, technologies, and services that support the Company’s various communications services, as well as companies to which certain non-technical functions can be outsourced;
• Channel and Distribution Partners, including various indirect sales personnel and other independent service providers that sell products and services on Nextel’s behalf;
• Technology Partners, including various device manufacturers and technology companies that work with the Company to ensure that it is able to provide effective and reliable services to its customers; and
• Strategic and Alliance Partners, including market leading companies across multiple business sectors with which the Company collaborates on various joint projects in marketing, branding, and other fields. NII Holdings has a number of partnerships in place. This includes a wholesale distribution agreement with Telefonica, a distribution deal with Nokia Siemens Networks, and an operational partnership with SmartTrust.

Key Resources

NII Holdings’s key resources are its intellectual properties and technologies, its equipment and tools, its network of retail outlets and service kiosks, its online portals, its IT and communications infrastructure, its partnerships, and its personnel.

NII Holdings utilises a range of technologies in the provision of its services. Searches of records published by the US Patent and Trademark Office identified two patent applications in which the Company was named as assignee, both of which are entitled ‘Mobile telephone button’.

NII Holdings owns and or leases a number of physical properties across Brazil that are key to its operations. This includes the Company’s various offices, as well as Nextel Brazil’s network of 469 indoor sites and 433 global system for mobile sites.

Cost Structure

NII Holdings incurs costs in relation to the development of technologies and solutions, the procurement of supplies and professional services, the development and operation of its online sales and support portals, the maintenance of its IT and communications infrastructure, the implementation of advertising and marketing campaigns, the management of its partnerships, and the retention of its personnel.

For the six months ended 31st December 2015 NII Holdings recorded total operating expenses in the amount of $682.25 million. This included cost of service in the amount of $212.85 million, selling, general and adminsitar8ive expenses totalling $304.82 million, and cost of handsets and accessories totaling $46.90 million.

Revenue Streams

NII Holdings generates revenue through the provision of various wireless and mobile communications services to individual and business customers in Brazil. The Company derives its revenue in multiple ways:

• Subscriptions fees, including revenue derived from the sale of subscription communications services;
• Products Sales, including revenue derived from the sale of various mobile devices and accessories online and through its network of retail outlets; and
• Service Revenue, including revenue derived from the fees collected in relation to the provision of various business solutions and other communications services. For the six months ended 31st December 2015 NII Holdings generated total operating revenue in the amount of $429.43 million, down on the $683.71 million in revenue recorded by the Company for the previous six months, prior to its emergence from bankruptcy. The vast majority of the Company’s revenue is attributed to its service and other revenue, with sales of devices and accessories comprising a small portion of the Company’s overall revenue.