American holding company NII Holdings, Inc. (formerly Nextel International) looks set to exit Latin America completely as it puts its 70% stake in Nextel Brazil up for sale, according to Reuters.
The news comes months after Norway-based Ice Group sold off its 30% stake in Nextel’s Brazilian operations to Access Industries, founded by Ukrainian-born British-American investor Leonard Blavatnik.
Potential acquirers include Telefonica Brasil SA, the country’s largest telecom company, and Access Industries, as it already controls a 30% stake.
If Access does not acquire NII’s 70% stake, it may be ‘dragged along’ to sell its 30% stake if the acquirer wants the entirety of Nextel Brazil, says Reuters.
Despite being the country’s fifth largest telecom carrier, NII’s Brazilian unit is not making profit. Yet its extensive spectrum assets are attractive to rival operators that are planning to bolster operations.
As of now, they cannot pick up Nextel’s spectrum as there is a legal spectrum cap put in place by the telecom regulator. However, Reuters says the regulator, Anatel, may soon remove the cap as carriers are struggling to widen operations to other regions.
NII Holdings, which went through bankruptcy proceedings in 2014, has already exited Mexico, Chile, Peru, and Argentina.
Cut-throat competition in the Brazilian market could be a reason for the sale of Nextel Brazil. Nextel is not making any profit in the country despite having more than 3 million subscribers.
Recently, it turned off its iDEN network, saying that it would bolster 3G and 4G networks. Analysts say it delayed a lot to launch 4G/LTE services.