Nextel moves to stem market loss in the country

SÃO PAULO-Nextel is turning upside down its strategy after finishing the second quarter with 8.3% drop in the number of clients in relation to 2012. The company is going back to decisions that affected customer service and led to technological backwardness in relation to the competition. Nextel's President in Brazil, Gokul Hemmady, says he knows that the radio does not attract more clientele. The difference, now, is on offer.
The internet is precisely the? Achilles heel? from Nextel, according to sources of the telecommunications market. The company is very late compared to competition. While Vivo, TIM, Claro and Hi offer the 3 g service for at least four years, Nextel still crawls in the industry. At the moment, while Nextel begins to more aggressively expand the 3 g network, the other carriers are already in the 4 g technology.
The mobile broadband service from Nextel, for now, is limited to São Paulo, to be extended to Rio de Janeiro by the end of the year. However, the offer of the company's equipment will be restricted until early 2014, when customers of the company can finally use the equipment most popular among users of higher purchasing power, like the iPhone, from Apple, and the family Galaxy, Samsung.
Like Apple and Samsung will not adapt their apparatus to offer radio, access to the product will be made by an application created in conjunction with Google, Prip, which will only be available to subscribers of Nextel.
The shortage of aircraft represents a contradiction to the intention of the company to attend, mostly to companies and individual clients of the classes A and b. This mismatch between audience and offer Nextel's recipe made with devices plummet 40% in the second quarter of 2013, as compared to the same period last year.
Lost time
So much delay in relation to competition is the result of misguided strategies. The possibility of the company enters the age of mobile broadband was opened in December 2010, but just starts to come true now, two and a half years later.
According to market sources, the NII-holding company that controls the company-imposed to the Brazilian subsidiary outsourcing work network and expansion of information technology to Nokia Siemens and HP.?The decision led to the fall in the quality of service and network deployment took well longer than expected?, says the source.
The problems were most evident at the end of 2011, when it ended the period of stability of Nextel employees who had migrated to the contracted companies. ?It was a cost reduction that also impacted the Nextel stores systems?, explains the source. ?The client tried to change the plan, but couldn't. A negative circle.?
In addition to internal problems, Nextel also didn't act quickly enough when your market differential ceased to exist. Until recently, the radio was the most practical way of two people communicating without paying a connection. According to the Manager of the telecommunications area of the consultancy Frost & Sullivan, Renato Pasquini, this reality has changed in the last four years, with the launch of the plan of unlimited calls TIM, strategy that was soon adopted by other carriers. ?The voice market is mature and be competitive in that area no longer represents more a lot?, says the expert.
Back to the beginning
Hemmady, who was Director of operations at NII and assumed the Brazilian operation late last year, claims that most of the mistakes of the past is being corrected. Network outsourcing, for example, has been aborted. He claims that the company has already hired 400 employees own to accelerate the expansion of the 3 g network. ?From now on, the offerings are a mix of voice and data, but the focus will be on data?
The Executive says unconcerned with the fact that competition is a step forward as regards technology. ?I don't think the consumer is interested if the service is 3 g and 4 g, but rather on the browsing experience?, says. The Chairman of Nextel in Brazil says it will be a year of 2013? stabilization? the services, which should lead to an improvement of the end result of 2014.
Financial markets, however, does not see the situation under the same Prism. A report by us Bank JP Morgan reduced estimates for the action of holding NII, which is traded on the Nasdaq electronic stock exchange, because of the company's difficulties in deploying 3 g service in Brazil and in Mexico, its main markets. Analysts Andrew Baggio and Marcelo Santos also reduced estimates for revenue and Ebitda (earnings before interest, taxes, depreciation and amortization) for the years 2013 and 2014. The information is from the newspaper O Estado de s. Paulo.