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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, howev...

Sprint Nextel (S) has been in the news quite a bit lately. First, there is news that Deutsche Telekom might make a bid for the company. Then we hear that Sprint may be seeking to spin off Nextel. The latest news is that the Sprint Clearwire (CLWR) WiMax combination is on again with backing from a number of big players. In all the discussion, most writers take pains to point out what a disaster the original Sprint-Nextel merger has been. The finger is usually pointed at Nextel which has established a dismal trend of losing customers and is now embroiled with the FCC in a disagreement over how to handle network interference with radios used by police and firefighters. Do Nextel's problems indicate something inherently wrong with the franchise or are these problems the result of the merger? It may be instructive to look at how the Nextel brand is doing in a situation that doesn't include Sprint. NII Holdings (NIHD) is a company I have written about before ( read earlier post ). Th...

NII Holdings (NIHD) provides mobile telecommunications services in Latin American markets including Mexico, Brazil, Argentina, Peru and Chile. NIHD was formed in 1996 as a subsidiary of Nextel Communications - now Sprint Nextel (S). The firm exports the Nextel brand to Latin America (in 2002 it sold its operations in the Philippines). Based on Motorola's (MOT) iDEN technology, the service supports domestic and international cellular phone, numeric and text messaging, 2-way radio (Push-to-Talk), and Internet access services from a single handset. On April 4, the company announced that its first-quarter net profit rose 35% to $113.6 million, or 65 cents per share, from its year-ago profit of $84 million, or 47 cents per share. Analysts had predicted a profit of 63 cents per share. Operating revenue climbed 39% to $993.2 million as the company added 321,700 subscribers. Total customer base now exceeds 5 million. Just prior to the earnings announcement, Wachovia Capital Markets came ou...

Since BigBand Networks ( BBND ) is part of our model portfolio, I feel compelled to comment on the devastating news released after the close last Thursday. The company announced that it would encounter a revenue shortfall and be unprofitable in the third quarter. BigBand now expects to report revenue for the third quarter in the range of $35 to $39 million, which is below the company's previous guidance of $54 to $58 million. The lower revenue outlook is due to several factors. BigBand has been deploying switched digital video across an expanding number of customers and configurations. Some of these ongoing deployments have required more software customization and integration than originally expected. In other words, the company underestimated the effort and the timeline. This has impacted their ability to book revenue for some of these deployments in the third quarter. The company also said it experienced a slowdown in Telco-TV revenue, as its "major customer" worked thr...

Today on 24/7 Wall Street , a post titled "A Motorola (MOT) Rally" cast doubt on the stock's recent advance and questioned positive analyst comments. The post is brief so I will quote it in its entirety: "Motorola's (MOT) shares are up almost 10% since late last month. RBS recently upgraded the shares due to a strengthening handset market and improved products, according to Barron's. Cowen upgraded the stock last week. Most of the improvement in the share price is based on two theories. The first is that the overall demand for handsets is rising. But, Motorola may be getting no benefit from this, Its market share dropped from a high of 22% over a year ago to a current level of under 15%. Samsung and Sony Ericsson have taken a great deal of that business. And, Nokia's (NOK) piece of the market is still growing, approaching 40%. Even in a rising market, MOT's market share may be continuing to fall. The second line of thinking is that new models will rep...

It seems that there is a mini-boom going on with mobile marketing companies. There are acquisitions taking place left and right and there are tons of start-ups jumping into the space. In May of this year, AOL acquired mobile-ad startup Third Screen Media and Microsoft (MSFT) bought French mobile-ad firm ScreenTonic. Last year VeriSign (VRSN) bought m-Qube. This week, Nokia (NOK) bought Enpocket. As we have written in previous posts, Google is moving rapidly toward mobile search ads while Yahoo is rumored to be eyeing several startups and has already launched mobile display-ads. It reminds me of the buy-out activity we saw recently where online advertising companies were being purchased by some of the same acquirers listed above. I thought it might be a good idea to look for public companies in the mobile advertising or marketing space that might be good acquisition targets. Three themes emerge -- Here are the main points of what I found: 1. The pickings are slim in the public stock mar...

Today it was announced on the Barron's web site that Qualcomm (QCOM) had lost Motorola ( MOT ) as a customer. Motorola has long included Qualcomm chips in their handset products. That relationship has ended. Freescale Semiconductor, a current Motorola supplier, will be picking up the slack short-term and Texas Instruments ( TXN ) will become the eventual long-term replacement. We have written a number of previous posts on Qualcomm since the company became part of the TradeRadar model portfolio. Selection of QCOM was in large part based on long term expectations that its patent portfolio would allow it to prosper as telecom companies made an expected shift toward Qualcomm's technologies as they migrated to "3G" WCDMA standards. We made the point that to a certain extent we were "buying on bad news" as Qualcomm stock was down mostly due to its legal situation. Since then we have taken Qualcomm management to task for the ineffective handling of the lawsuits in ...

Lehman Brothers upgraded mobile phone maker Motorola Inc ( MOT ) to overweight from equal weight, saying improvements in operating expenses should help the company's phone unit return close to break-even by the fourth quarter. Operating expenses are important but so are compelling products and Motorola is lacking in buzz at the moment. Motorola does not have anything close to the iPhone, for example, and the RAZR, while still a good seller, does not have the cachet it once had. If buzz isn't the strategy, then heading in the opposite direction and dominating the low-cost market sector is a viable alternative. Motorola has not been especially successful in this area either, having admitted it can't match competitors prices. To make matters worse, Sony-Ericsson is now entering this market and that will only make the sector more competitive and more difficult for Motorola. Given that growth is so strong in emerging markets where high-end devices are not necessarily in highest ...

I was somewhat surprised when I heard that Sprint Nextel ( S ) was building a separate network based on WiMAX technology. This is not a replacement for its 3G cell phone system but in addition to it. Why would they do such a thing given the scale, complexity and cost? Are they doing this in the hope that if they build it, they (customers) will come? So first of all, what is WiMAX and why is it significant? Technically speaking, it is a 4G wireless broadband network that uses the mobile WiMAX (Worldwide Interoperability for Microwave Access) IEEE 802.16e-2005 technology standard. Why is that good? Because you can get high-speed Internet access with it for devices ranging from phones to PCs and devices we haven't thought of yet. And in this case, WiMAX "high-speed" is significantly faster than typical Internet access via current mobile phone technology. It will be a real data network, not a data pipe bolted onto a telecommunications network. What could this lead to in the f...

The markets just jumped on the back of a good earnings report and good guidance from Cisco . John Chambers has described how the company has become more than just a networking company. The vision he has put forth ranges from Internet infrastructure, enterprise networking, consumer products, TV set-top boxes, various kinds of software and more. It has been noted that Cisco has invested in the VMware IPO. It is less well known that Cisco has plans for taking over the datacenter itself. Cisco envisions the eventual replacement of local devices with shared network resources. This is a trend that is underway already with the advent of storage area networks and network attached storage, both essentially comprised of banks of disk drives that can be flexibly deployed as needed. Server virtualization as implemented by VMware and others has become the next major advancement in abstracting datacenter devices into a resource pool configurable by software. Cisco has begun to define the capability...

Millicom Cellular ( MICC ) has been a member of our model portfolio for some months now, and had rolled up a double digit gain. Regrettably, MICC gave the TradeRadar SELL signal as of the end of trading on 7/25. Its closing price that day was $82.64. Trying to be a disciplined investor (any system is better than no system, or so they say) I sold at the opening on 7/26, the very next day, and obtained a meager price of only $79.17, basically breaking even on the investment. From a closing price of $97 on Monday, 7/23, the stock had dropped almost 20 points in less than three trading days. What happened? On Tuesday, management reported worse-than-expected second-quarter earnings and spooked investors with talk of tough competition. How bad were the earnings? Earnings before interest, tax, depreciation and amortisation (EBITDA) totaled $263 million, up from $160 million a year earlier but below an average forecast of $269 million given in a Reuters survey of analysts. EBITDA gains of 65% ...

Google ( GOOG ) is considering making a bid for a swath of RF spectrum that TV broadcasters are vacating as TV moves toward digital high def. The FCC intends to award wireless licenses within this frequency spectrum as soon as rules governing the auction and use of the spectrum are finalized. As announced in a letter to the FCC, Google has certain pre-conditions they wish to see met before they enter the bidding. The pre-conditions relate to "openness". According to the Wall Street Journal, Google is requesting that the FCC require that winners of licenses covering a large portion of the spectrum "let consumers use any compatible wireless devices and software and open the network to resellers and other service providers." Google is requesting that the draft rules, which do include similar language, be made more specific and enforceable. The Journal further reports that "Google wants the spectrum owner to operate it at least partly on a wholesale basis, requirin...