NII HOLDINGSA Situational Analysis and Solution

Kyle HadeedBA 301 Final Term Paper

Section 00106/03/2015

EXECUTIVE SUMMARY.....................................................................................................4

SITUATIONAL ANALYSIS..................................................................................................6COMPANY OVERVIEW......................................................................................................................6BUSINESS STRATEGY........................................................................................................................6MISSION, VISION, VALUES................................................................................................................7

Mission Statement..................................................................................................................7Vision.....................................................................................................................................7Values....................................................................................................................................7

STAKEHOLDERS OF NII HOLDINGS......................................................................................................8FINANCIAL PERFORMANCE..............................................................................................................10MARKET SHARE............................................................................................................................12SWOT ANALYSIS..........................................................................................................................13FUTURE OUTLOOK.........................................................................................................................15INFLUENCES.................................................................................................................................15

PROBLEM ANALYSIS & DESCRIPTION........................................................................15PROBLEMS...................................................................................................................................15

Loss of Subscribers..............................................................................................................16Low Market Share................................................................................................................16Decrease in Operating Revenue...........................................................................................16Revenue Per Subscriber.......................................................................................................16Increase in Total Customer Turnover Rate..........................................................................17Increase in Currency Rate in Argentina...............................................................................18

PROBLEM STATEMENT...................................................................................................................18Assessing the Root Causes of the Problem...........................................................................19Lack of Variety of Technology.............................................................................................19Low Capital Compared to Competitors................................................................................19Loss of Subscribers..............................................................................................................20Lack of Competitive Edge....................................................................................................20Fishbone Diagram...............................................................................................................21

SOLUTIONS........................................................................................................................22SOLUTION ANALYSIS......................................................................................................................22

Sell Mexico Market to AT&T and Allocate Funds to Brazilian Market................................22Widening to New Services supported by WCDMA network..................................................23Marketing and Promotion Plan............................................................................................24

WEIGHTED DECISION MATRIX.........................................................................................................25Effect on Stakeholders..........................................................................................................25Potential Risk.......................................................................................................................25Long Term Financial Impact................................................................................................25Total Cost.............................................................................................................................26

RECOMMENDATION........................................................................................................26GOAL OF SOLUTION.......................................................................................................................27ETHICAL SCREEN...........................................................................................................................27COST BENEFIT ANALYSIS.................................................................................................................27FEASIBILITY..................................................................................................................................29

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IMPLEMENTATION PLAN...............................................................................................29

SUCCESS METRICS...........................................................................................................29EVALUATION................................................................................................................................30

BIBLIOGRAPHY.................................................................................................................31

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Executive Summary

NII Holdings is the telecommunications company that is a branch of Nextel. They

are in three markets; Brazil, Argentina, and Mexico. While NII Holdings is active in

trying to expand their market share and revenue, sales have shown otherwise. Through

out the last four years, total revenue has continued to plummet. This paper will show why

their financial performance has been poor, possible solutions to improve market share, as

well as a final recommendation to help increase market share- That NII Holdings should

launch a Marketing and Promotion campaign.

A company overview will help you give you an in depth analysis in why NII

Holdings is continuing to be in the red. NII Holdings mission, values, vision, and

stakeholders will be introduced to help understand what the company is known for.

An overview of NII Holdings financial performance, along with their Swot

analysis will give a better picture into why they are failing and what they should do to

turn their company around. We will indulge in brief overview of the industry along with

the future outlook of the telecommunications market. This will give a better

understanding in why problems are present.

A fishbone diagram was used to understand what problems NII Holdings is facing,

and why they have continued to have low market share. Stated below are the problems in

the fishbone diagram

Lack of variety of technology

Low capital compared to competitors

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Loss of subscribers

Lack of competitive edge

Three solutions were considered in fixing the problems that they are facing. Below,

are the solutions that were looked at.

Create a Marketing and Promotion Campaign

Sell Mexico Market

Widening to New Services supported by WCDMA network.

These three solutions will be compared in a weighted decision matrix and the one

with the highest score will be the final recommendation. Along with finalizing a specific

solution, a cost benefit analysis will be presented to show the tangible and entangle

benefits and costs of this solution. An ethical screen will be shown to show how the final

recommendation affects their values. A feasibility analysis will also be presented in

showing how easily this solution will be implemented.

Finally, an implementation plan will be conducted to show what would be need to set

this plan in start. Along with an evaluation strategy to show how well the

recommendation helped NII Holdings.

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Situational Analysis

Company Overview

NII Holdings is a telecommunications company that is a subsidiary of Nextel.

They provide wireless communication services in three major countries; Brazil,

Argentina, and Mexico. (NII Holdings 10-K 2014).  NII Holdings uses the IDEN

network, developed by Motorola that targets businesses and consumers that are in the

middle to upper class.  (NII Holdings 10-K) NII Holdings currently employees 9,800

employees, and their corporate office is based in Reston, Virginia. They were created in

December, 2001 and branched as their own entity. They are committed to product

development and are strategically expanding in their regions.

(NII Holdings 10-K 2014)

Business Strategy

NII Holdings is a provider of differentiated mobile communication services

operating under the Nextel brand in Latin America, focused on providing businesses and

high value consumers with fully integrated wireless communication tools, superior

customer service and an expanding network footprint. (NII Holdings About Us)

NII Holdings targets high valued customers and business with their Postpaid

Offerings. They believe with doing so, they will generate higher revenue and a higher

profit margin. They depend on their brand reputation to be the market leader. Customer

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service and expanding their product portfolio to help attract new customers is how they

make NII Holdings stand out. NII is dedicated to provide great quality network, for

example, the recent change to add 3G to their expanding network. In order to do all of

this, their goal is to hire and retain the best possible talent around them.

Mission, Vision, Values

Mission Statement

NII Holdings is the Preferred Provider of Superior and Differentiated Voice and

Data Solutions to High Value Customers in Latin America. (NII Holdings About Us)

Vision

NIIs vision is continuously moving forward in the region by strategically growing

its business and evolving to next generation network platforms. (NII Holdings About Us)

Values

NII Holdings main value is to help aid the community through programs that help

benefit families. Listed below are the programs NII Holdings has supported throughout

the years.

Habitat for Humanity International (HFHI)

Ronald McDonald House

Reston Interfaith Inc.

The International Red Cross

The United Nations Children’s Fund (UNICEF)

World Education and Development Fund

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They also participate in “Inova Blood Drives, the Susan B. Komen Breast Race for

the Cure, Southgate Community Initiative, Arlington Food Assistance Center, and the DC

Help the Homeless Walk.” (About us NII Page). With contributions, employee

commitment, and sponsorships, NII was given the Best of Reston Award for outstanding

community service. Also in 2014, Nextel Brazil, which is the main branch of NII won the

“Socially Responsible Company by the Mexican Center for Philanthropy (Cemefi) and

the Alliance for Social Responsibility (AliaRSE) for the 10th consecutive year.” with

winning these awards, it shows that they are a credible company that lives by their values

and takes responsibility in aiding the community.

NII Holdings vision and business strategy connects in various ways. Their main vision is

to provide great quality network to help accelerate their growth. With updating their

services and products, they are trying to make a push to control more market share in the

industry. Their strategy was to provide a 3G network to consumers, and their vision in the

past was to do so. Their strategy is to continue to grow their network, and obtain more

subscribers within the Latin America market.

Stakeholders of NII Holdings

Argentina: There are 1,954,400 subscribers in Argentina, which is 21.28% of NII

Holdings total subscribers. With having these subscribers, they have renovated over

$424,971,000 in total revenue. NII Holdings employs 1,194 individuals throughout

offices located in the Buenes Aires area.

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Brazil: This country has 4,341,500 total subscribers, which is 47% of NII

Holdings subscribers. With Brazil having the most subscribers from Argentina and

Mexico, their total revenue is the highest at $1,848,918,000.

Mexico: With the remaining subscribers (2,888,500), Mexico holds 31.5% of

NIIs customers. This past year, revenue was $1,417,163,000, which was the second

highest revenue within the three countries.

United States, Virginia: Employees at the headquarters of NII Holdings are

locating in Virginia

Two Brazilian Banks: NII Holdings Inc. owes $343,915,000 to the banks. If NII

Holdings fails to pay their debt, the creditors will lose their invested income. (NII

Holdings 10K 2014)

Shareholders: 60,000,000 shares of authorized common stock and 10,000,000

shares of preferred stock distributed to shareholders. With a decline is stock; there is a

decline of shareholders wealth. (10K)

Employees:  NII Holdings employees over 9,800 individuals throughout four

countries (NII Holdings 10K 2014)

Motorola: NII carries Motorolas services and products for their consumers.

Various Organizations:

Various Organizations: Habitat for Humanity International (HFHI)

Ronald McDonald House

Reston Interfaith Inc.

The International Red Cross

The United Nations Children’s Fund (UNICEF)

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World Education and Development Fund

NII Holdings donates to these programs to help families and children within a

community. (Social Responsibility)

Competitors: NII Holdings takes away market share from America Movil, and

Telefonica (NII Holdings 10K 2014)

Financial Performance

Below is the Consolidated Statements of Comprehensive Loss (NII Holdings 10K 2014)

Since the end of year 2012, NII Holdings has been in a financial crisis. Operating

revenues have decreased and half almost have gotten cut in half. Operating costs have

been steadily the same, but with them not cutting down on their costs, their net loss keeps

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on growing. ach year, their comprehensive loss has grown, and is now 2,322,974 at the

end of the 2014 fiscal year.

From the year-end 2013 to 2014, there was a decrease in sales by 23.69%. However,

costs of goods sold have relatively stayed the same. This is a basic financial downfall. A

company cannot grow and succeed at an unsustainable revenue to expenses turnover.

This dramatic financial ratio is the beginning of the downfall and eventually led to the

bankruptcy of NII.

Taking a deeper look into the expenses of NII, the SG&A naturally decreased,

however the expenses of handsets and accessories had dramatically increased.  This could

possibly be due to the devaluation of the U.S. dollar compared to its value from 2013 to

2014.

In 2013, there was a substantial difference in cash flow; this was mainly due to

the 1,600,000 issuance of senior notes. This dramatically changed the ending cash flow

balance and created a gap of 66.85% from 2013 to 2014. The issuance of senior notes

was mainly used to create another source of equity and having available cash flow for the

company to use in different areas of operation. This was good, however, only for a

temporary time.

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 Now, we take a look at the ratios to see the personal side of the operations. A key

statistic is the net income per employee. This ratio depicts the level of productivity each

employee brings to the table. With a ratio of -181,358, it shows that either the company

has employed too many employees and has overcompensated, or the level of productivity

per employee has suffered so much that it is unsustainable. Either way, the rough ratio

falls on the management by not training the employees enough to sell efficiently or over

employed the staff needed to handle the demand.

Another distinct attribute that made a drastic impact on cash flow was the income

tax deferred.

Market Share

NII Holdings Inc. has a low market position in the telecommunications industry.

Within Latin America’s three countries; America Movil and Telefonica controls Mexico,

Argentina, and Brazil.

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Below are statistics for each company of the market share in Mexico, Argentina, and

Brazil.

SWOT Analysis

By looking at NII Holdings SWOT report, there are strengths, but many

weaknesses. As shown below on the table, the only strengths this company has is having

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a robust service portfolio, and spectrums in key markets. NIIs weaknesses are more

extreme, compared to their competitors. As stated, they have a lack of geographic

presence, compared to Telefonica and America Movil. NII Holdings holds such a small

percentage of market share and are threatened by these corporate giants where they are

limited to grow.  Each year, total subscribers have depleted while their competitors

subscribers continue to rise. Motorola is the only provider of technology NII has, which

makes them very limited.

(NII Holdings SWOT Report 2014)

The telecommunications industry in Latin America is on a path to grow. Listed

below are statistics on the outlook of this industry.

-3G/4G connections to increase 80% by 2020

-By 2020, 300,000 more jobs will be created. Making the total to 1.3 million.

-Forecasting 605 million smartphone connections, compared to 165 million from 2013.

-Subscriber growth will increase 7% by 2020, to 390 million.

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Future Outlook

Based on the future outlook of this industry, all companies will be impacted in a

great way. With more subscribers and increased technology, NII Holdings will be able to

add products and services to their portfolio that will bring in new customers. The demand

for telecommunications will continue to rise, and there will be a great opportunity for NII

to expand its customer base and bring back its old subscribers.

Influences

The major external influence that will affect the telecom industry, as well as NII

Holdings is the future advancements in technology. By 2020, majority of Latin American

countries will convert from 3G to 4G. NII will have to make the jump to 4G to continue

to compete with other companies that will provide this network. Not only that but, more

and more smartphones will be supplied to consumers, and NII’s main form of technology

is Motorola. They will have to branch out and look into the smartphone market, such as

IPhone and Samsung smart phones.

Problem Analysis & Description

Problems

NII Holding is facing five problems that have impacted their financial

performance, loss of subscribers, decrease in revenue, high customer turnover ratio, and

currency changes. One main problem has been selected as a problem statement, and will

be discussed later in the analysis.

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Loss of Subscribers

NII Holdings overall net loss subscribers between the year end dates of

12/31/2013 and 12/31/2014 are 61,400. Brazil is the only country where they have

increased subscribers, with an overall growth of 383,300. (NII Holdings Annual Report

2014). Mexico and Argentina’s subscriber base has declined tremendously. Between the

two countries, a total of 440,700 subscribers have been lost. (NII Holdings Annual Report

2014)  With a decline in subscribers, market share and overall revenue have declined.

Low Market Share

NII Holdings has an extremely low market share compared to their competitors.

The companies America Movil, Telecom Italia, and Telefonica hold the majority of the

market in Brazil, Argentina and Mexico. Listed below is a table showing the percentage

of market share owned by each company and its two main sectors.

Decrease in Operating Revenue

In 2013, operating revenues were $4,711,567 (In thousands). While in 2014, total

operating revenue dropped to $3,688,720 (In thousands). (NII Holding Annual Report

2014). Shown below is NII Holdings target revenue for each quarter. They did not reach

any of their revenue goals, and fell short $230 million dollars. Shown below is the NII

Holdings target

Revenue Per Subscriber

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According to NII Holdings June 2014 Swot Analysis, earnings per subscriber

have dropped from $39 in the beginning of 2013, to  $29 in the first quarter of 2014.

Most due of this is due to the competition within these three markets and customers

choosing lower cost plans.

Increase in Total Customer Turnover Rate

NII Holdings has shown a drastic increase in customer turnover ratio from the

year ending 12/31/2013 to 12/31/2014. The two tables below illustrate the turnover ratio

categorized by country and two different networks.

The following graph depicts the turnover ratio in 2013

(NII Holdings 10-K 2014)

The following Graph depicts the turnover ratio in 2014

(NII Holdings 10-K 2014)

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Overall customer turnover has increased by .26%. With high rates of customer

turnover, NII Holdings abilities to become profitable will decrease. With losing

subscribers, there will be a loss of revenue and cash flow, and will require sales

commission expense to attract replacement customers. The costs of acquiring a new

subscriber are much higher than retaining previous subscribers. (NII Holdings Annual

Report 2014)

Increase in Currency Rate in Argentina

From 2012 to 2014, NII Holdings has been negatively affected by the devaluation

of the Argentine peso. This is shown in the graph below, however, if not researched; this

does not seem like a problem when looking at the income statement of NII Holdings.

Knowing this information can drastically change the financial outlook of NII Holdings.

Between the year-end dates of 12/31/2013 and 12/31/2014, the Argentina market has lost

a total of 33% of their revenue. (NII Holdings Annual Report 2014)

(NII Holdings 10-K 2014)

Problem Statement

As a result of inefficient growth in the amount of subscribers; and a lack of

competitive advantage, NII Holdings has failed to compete with their key competitors,

and has lacked market share in Brazil, Argentina, and Mexico. Since 2012, Brazil’s

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market share has gone down from 1.67% to 0.54%, Argentina has shown no growth with

an annual market share of 3%, and Mexico has shown no growth at 4%.

Assessing the Root Causes of the Problem

A fishbone diagram was created to find the main causes in why NII Holdings has

had a depleting market share. All of the causes will be explained in this paper.

Lack of Variety of Technology

NII Holdings depends on one form of technology, which is IDEN Motorola. The

spectrum that a NII Holdings use is noncontiguous, which only the IDEN technology is

compatible with. They are restricted into using this one form of technology, even if they

want to expand into a different variety of technology. There are more individuals that are

seeking a diverse field of technology where they can have different options. (SWOT

Analysis 2014) If Motorola fails to deliver their technology system equipment on time, it

cannot service its existing customers and cannot obtain new consumers. (SWOT

Analysis) With the dependence of this one form of technology, NII is limited in buying

future equipment that could be more enhanced, if not obtained, will decrease their

revenue in the future.

Low Capital compared to Competitors

Low Capital Compared to Competitors

Compared to its competitors, NII Holding has very low capital. In 2013, total

revenue was $4,772,600. While looking at Telefonica, their companie’s revenue was

$79,135,000 and America Movil’s was $60,385,500.  (Swot Analysis)

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With having low capital to work with compared to their competitors, they have

much lower financial and marketing resources to reinvest back into their company to help

it grow. They cannot take on a larger customer base, and their spectrum positions will

continue to stay low. With having such low revenue, profitability will be lower than

Telefonica and American Movil, even if our profitability percentage is better. They have

more access to funds and would have lower costs of financing, rather than us, dealing

with high interest.

With being so limited in capital, we are not be able to expand our coverage’s to

other countries, and will be limted to the markets that we are already in. Due to our

competitor’s capital, they have provided larger service coverages areas and have taken

most of the market. (NII Holdings Annual Report 2014)

Loss of Subscribers

Loss of Subscribers

NII Holdings has lost 61,400 subscribers from the year-end dates of 12/31/2013 to

12/31/2014. (NII Holdings 2014 10-K) Although, this may not seem like a lot, while

looking at a successful company you must depend on a small growth, rather than a loss of

customers.

Lack of Competitive Edge

NII Holdings competitors have done a wide variety of strategies that have

increased their market share, while decreases NII’s. NII Holdings depends on their

handsets to create revenue. Their competitors such as Telefonica and American Movil

have more handset subsidies than them. With offering high commissions to distributors,

NII Holdings competitors will have the competitive edge to obtain new technology and

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handsets faster. NII Holdings is strictly restricted to Motorola handsets, while their

competitors are using a broader range and different forms of them that will drive

customers to their company. (NII Holdings 2014 10-K)

While NII Holdings does not have the capital to expand their networks and provide

strong network coverage, their competitors are able to do that, and will continue to gain

more customers. Also, competitors have provided discount or free airtime to their

customers, while NII is not able to, due to lack of funds.

Telefonica and American Movil have offered incentives to large customers to

switch to their network by buying out the current contracts of their consumers, and

providing no fees. Also, have offered bundled telecommunications services that NII does

not have.

Our competitors, due to us not holding the rights to use other spectrums, dominate

the Argentina market. Without using other spectrums it is impossible to enhance their

services with new technology. (NII Holdings 2014 10-K)

Fishbone Diagram

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Solutions

Solution Analysis

Three solutions have been have been created to address the problem of declining

market share and an overall low market position. These solutions are to give NII

Holdings the opportunity to increase market share in Brazil, Mexico, and Argentina.

Sell Mexico Market to AT&T and Allocate Funds to Brazilian Market

With selling the Mexico market to AT&T, NII Holdings will receive funds, and

will dedicate those funds in the Brazil market. From the three markets that NII is in,

Brazil has the most room to grow. They have less than 1% market share, but yet, they

generate the most sales for NII Holdings. A portion of the funds will be used to create

more neurotransmitter towers. As of this year, NII Holdings has 9,157 total sites to

provide communication within their network. (NII Holdings 10-K 2014) 3,000 more sites

will be distributed around Brazil to have a overall, better communications connection.  

Not only will they will build new towers, they will be offering new higher speed

services. As of now, Brazil is offering 15 Mhz on average connection, while their Mexico

and Argentina markets are operating at 20-22 Mhz, respectfully. With generating a higher

range of Mhz, customers will be more attractive to stay with NII, along with attracting

new consumers to make a switch to their company. With the new found capital, this

allowing NII Holdings to uphold its current rates for its products. They will be able to

provide more efficient speeds, while keeping their prices very low. This makes their clear

object to increase their market share.

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Widening to New Services supported by WCDMA network

NII Holdings success is based on the products that they offer their consumers.

Having insufficient products with unreliable speeds is what differentiates NII Holdings

from their competitors. Offering more efficient products can drastically alter the position

NII Holdings is currently in.

As of now, NII holdings use 3G services; this limits their capability to compete

with their competitors. There are two key services that NII Holdings will add to their

portfolio that will increase the potential to gain market share.

The first service they will integrate in their systems will be 4GLTE. LTE has the

capability to deliver fast, efficient data speeds up to 1000Mbps in the downlink, and

50Mbps in the uplinks (GSMA About Us). Implementing this technology will give NII

Holdings a competitive edge in offering the fasted growing service in the

telecommunications market to customers that are only offered slower speeds.

The next service that NII Holdings will incorporate in their systems will be the

feature, Roaming. With roaming, consumers will have the capability to make and receive,

phone calls and texts out of their home network. The consumer would only have to use

their regular phone number that will have the availability to work in 219 countries. This

drastically broadens their target market and offers consumers a useful feature in everyday

product use.  (GSMA About Us)

The addition of these two technology services will not give NII Holdings the

competitive edge against their competitors, however it will level the playing field.

American Movil (NII Holdings leading competitor) has and will continue to offer

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roaming services to its consumers. With NII Holdings not offering roaming services, this

gives them an opportunity to reach the same level of products its competitors offer.

Marketing and Promotion Plan

As of 2014, NII Holdings has allocated a total of 573,844,000 dollars to their

marketing expenses. (NII Holdings 10-K 2014)  This clearly shows that they are not

using their funds efficiently. A new marketing plan will be implemented, which will be

more effective, and will generate them more market share.

To generate more subscribers, NII Holdings will offer a buy-out for any

customer’s contracts from competitors to make them take their business to NII Holdings.

The consumer will need to bring in their contract information, along with their cell

phone. Once this is completed, NII Holdings will buy out the contract and offer their new

customers their services.

There will be no contracts and no service fees. Customers will be able to have an

open contract with NII Holdings, unlimited talk and text, with 10g of data for $50. There

will be an additional $35 for each line added to the customers account.

Even without a contract, the rates for each consumer will stay the same from the time

they switched to NII Holdings. There will be no increase in price to the customers

account, unless they would like to add additional lines or data.

In order for potential customers to hear about this offer, NII Holdings will implement an

online advertising campaign to promote the new promotional offerings. This will include

advertising on social media, as well as internet ads and television commercials. With the

advancing technological breakthroughs, NII Holdings will be able to reach a broader

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audience, thus increasing their customer and base and market share within these

geographies.

Weighted Decision Matrix

A weighted decision matrix was used to provide which solution NII Holdings

should implement. The information below will provide will provide the criteria used,

along with the weight that was given to them. The solution with the highest decision

matrix score will be the one they use.

Effect on Stakeholders

In order for a business to grow and succeed, it’s stakeholders, which range from

employees to stockholders, must believe in the companies long term goals. With the new

goals and plans in place for NII Holdings, these stakeholders will have a renewed view

on the potential growth and success of the company. For this reason, effect on

stakeholders was given a weight of .15

Potential Risk

Whenever a company decides to take on a new initiative, there are always risks

that might be detrimental to those plans. With potential plans to take place, it will either

help their financials or hurt them. With this being the case, risk should be considered with

picking which plan to chose from. That is why potential risk was given a weight of .25.

Long Term Financial Impact

NII Holdings revenue has decreased throughout the last four fiscal years. If

nothing is implemented correctly, revenue will continue to decrease. The effect on the

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long-term financial impact will be crucial and will and is most important in deciding on a

solution. This is why long-term financial impact was given a weight of .40.

Total Cost

With NII Holdings filing for Chapter 11, it is known that they need have the

lowest costs possible. The potential reallocation of costs within the business will be

useful and executing the plan to get NII Holdings back in the black. This is why total cost

was given a weight of .20.

Weighted Decision Matrix

Recommendation

The solution with the highest weighted decision matrix score was to implement

the marketing and promotion plan.

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Goal of Solution

The goal of this solution is a total revamp of NII Holding complete marketing and

advertising plan. Along with the recommendations that I have stated above, which

included a plan buyout proposal and a  more basic pricing policy, I look to overhaul the

entire marketing campaign. The amount of marketing and advertising dollars NII

Holdings has allocated to this sector has not shown its value, meaning different strategies

have to be made. Every market has different means of connecting to its potential clients,

with market share decreasing in Brazil, it creates a correlation that the strategies they are

implementing are ineffective.

With the promotion and marketing plan taking place, it will give NII Holdings the

opportunity to expand their customer base, along with increasing market share. With an

increase of subscribers, more revenue will be generated, which will give NII Holdings the

ability to retain and attract more customers in the future.

Ethical Screen

Based on NII Holdings ethics, this recommendation does nothing that will affect

employees or any other organization. This recommendation ties into their ethics by

providing create customer service to customers, along with a plan to improve the business

as a whole for their shareholders.

Cost Benefit Analysis

Tangible Benefits Tangible Costs

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Increase subscriber base

Increase in Revenue

$573M marketing plan as a whole

Total cost of marketing employees

Intangible Benefits Intangible Costs

Increase in brand awareness

Increase in market share

Potential risk in losing customers

Losing average revenue per customer

It will be hard to estimate the total increase in subscribers and revenue. If the

customer base expands, revenue will expand. There will be a great benefit in our market

share with the success of this solution. NII Holdings is sitting at the far bottom compared

to its competitors American Movil and Telefonica. Market share will be taken away from

those two giants and impact our company for the better. Along with our potential increase

in market share, with implementing this marketing and promotion plan, our brand

awareness will increase. More consumers will know about NII Holdings and what they

have to offer.

There will be a 573 million dollar marketing budget as a whole. This was NII

Holdings budget last year, and all the funds will be allocated in Brazil, Argentina, and

Mexico. With revamping and creating a new plan, the total cost of our marketing

employees will increase. The potential risks that NII Holdings will face is losing

customers, as well as losing the average revenue per customer. With having lower rate

plans, consumers will have the ability to select those options and their total bill will

decrease.

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Feasibility

This plan will be easily feasible for NII Holdings to implement. It will take a short

amount of time to generate this solution, as long as there is a set schedule. Funds will be

available due to the fact that NII Holdings is using the same marketing budget (573M) as

the last fiscal year. There is potential that the marketing budget will decrease assuming

that NII Holdings marketing strategy will be more efficient with its budget.

Implementation Plan

The new marketing plan will be designed strictly on the Brazilian population. The

implementation of the new marketing strategies will take approximately 2-3 months,

during this time period, NII Holdings will generate a marketing team of local Brazilians

will help us understand the culture and create the most efficient paths to reaching our

target market. The new marketing strategy will include advertising resources such as

YouTube ads, Internet banners and social media ads will help brand recognition in Brazil.

Creating a new pricing policy is almost ineffective if we do not broadcast it to new

customers, a main reason why a new marketing and advertising strategy is so large. There

will be slit risk during those several months because marketing will be down to a

minimum while our research team develops the most efficient and cost worth strategy to

reach new cliental.

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Success Metrics

Evaluation

To make sure this solution is a success, there will be an evaluation process while

the solution is taking place. Once the plan is implemented, each new customer that joins

NII Holdings will be put in a database along with their rate plan. There is a set goal of an

increase of 5% of subscribers within the two to three months after the new strategy has

been implemented. If that goal is met, the continuation of the marketing plan will strive.

Along with an increase in subscribers, NII Holdings is hoping for a revenue

increase of 3 million dollars each month. The software that will be used will depict

whether or not that goal is met.

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