Yesterday, NII Holdings (Nextel) launched its service Direct International Connection (CDI-acronym in Spanish), an extension for digital radio capacities that enable Nextel clients in Latin America to speak to other clients of the operator using the Push to Talk (PTT) technology. The service will be available in Argentina, Brazil, Peru, and the USA; while it will reach Mexico before the end of June and Telus¿s clients in Canada, as from the fourth yearly quarter. All in all, the PTT community will hold over 16 million users.

Investments to start up the CDI went over the US$ 6 million in the region. Launching Direct International Connection is ahead of schedule as regards plans held by cellcos in the region to implement PTT services by year-end. In fact, America Movil¿s quarterly report shows Nextel as its main rival in the Mexican corporate sector. The firm is intending to struggle for the latter by introducing PTT late this year.

However, Steven Shindler, CEO of NII Holdings sees no threat in Push to Talk on cells (PoC), as he considers PoC will offer poorer voice and latency quality. “In the USA, Nextel has shown its capacity to compete with six cellcos and attract some 15 million. Our goal is to become the most profitable, rather than increasing our client-portfolio”, said Shindler in a press conference. “CDI is not a reaction to compete, but a pre-active and powerful move to add value to our services”, he added.

The Panamerican PTT is an extension of the services Nextel offers nowadays. The firm was already offering “direct connections” between Argentina and Brazil, and between  Mexico and the USA. In the former, the service has an additional cost to total connection fees of around US$ 8, for unlimited radio communications that may render savings of 75% if using 100 minutes of international communications on PTT, instead of fixed telephony, according to estimates made by the Argentine unit. However, they assert they goal is not to replace traffic: “this is a new option”, they voiced.

In Latin America, Nextel ended the first quarter of the year serving some 1.55 million clients; between January and March, it added 89,200 subscribers. Corporate revenues totaled US$ 277 million, 36% up year-on-year. Ebitda was US$ 83 million (+45%), while operative revenues reached US$ 54 million (+39%). Final operative results were negative in US$ 40 million.

In spite of the loss, the firm improved churn levels, 1.9% (compared to 2.6% in the 1Q 2003), and average revenue per user (ARPU) was 10% higher (US$ 55 compared to US$ 50).

For 2004, the firm considers that turnover is to reach US$ 1.2 billion, thus accounting for an increase of 28%, and by year-end, it expects to add some 285,000 clients. Investments forecast reach US$ 225 million; part of the money will go to the spectrum tenders the Communications and Transport Secretariat in Mexico is preparing, and the rest, for coverage expansion in countries the firm has not yet entered. For the 2003/04 period, the firm will devote over US$ 60 million to Argentina. It may also start rendering digital services in Chile this year, after the Supreme Court dismissed claims filed by cellcos against the entrance of Nextel along 2003. The Chilean business plan implies outlays for around US$ 130 million.