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Tuesday, June 17, 2008

NII Holdings - still plenty of opportunity

I have written previously on NII Holdings (NIHD) in a post titled "NII Holdings bounces off bottom - can it keep up the momentum?" The company sells Nextel-branded cell phone service in Latin America including Brazil.

The company recently reiterated that it sees no slowdown in sales and the stock responded by continuing to climb.

In an article entitled "1.2 Billion Mobile Subscribers!", eMarketer discusses how cell phone use is growing in the BRIC countries (Brazil, Russia, India and China).

The article says that cell phones are increasingly the primary on-ramp to the Internet for users in these countries. From a marketing standpoint, the Internet companies with solid mobile offerings will benefit. Yahoo! (YHOO) has made a point of focusing on mobile perhaps even more than Google (GOOG) has. We will see the two companies continue their rivalry on cell phones and maybe there will be an opportunity for Yahoo! to gain some ground.

Getting back to NII Holdings, however, the article provides some positive macro background that supports NIHD's contention that growth remains on track. In Brazil, mobile phone penetration has reached 73% of the population but only 5.1% of mobile phone users access the Internet via their phone. This indicates plenty of room for growth, in terms of new users and especially in terms of up-selling existing users to more comprehensive service plans and higher end phones.

The outlook for NIHD remains positive and, with the stock trading just above its 200-day moving average, it may not be too late to take a position.

Sources: 1.2 Billion Mobile Subscribers!

Disclosure: author is long NIHD at time of writing

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