Question-and-Answer Session
Operator
Thank you. [Operator Instructions].
We will take our first question from Rick Prentiss with Raymond James.
Richard Prentiss - Raymond James
Yes. Good morning guys.
Steven M. Shindler - Chairman and Chief Executive Officer
Good morning.
Lo van Gemert - President and Chief Operating Officer
Good morning.
Richard Prentiss - Raymond James
Hey, I want to focus a little bit on the net adds if I could, I think Lo and Steve, you guys both mentioned the promotional activity in Mexico being accelerated and intensified. Obviously you guys are both seeing a profitable growth. But if you look at the NII traditional customer, how did the promotions from the competitors really affect your business segment, and your high-end consumer segment. Just talk? just a little bit about in Mexico, how that promotion affected kind of your core addressable market?
Steven M. Shindler - Chairman and Chief Executive Officer
Well, we haven’t changed our target and our approach as we've been sharing with you over the last several quarters. Even and since we embarked on our expansion plan, we've looked to increase our target. There is now over 20 million potential subscribers in Mexico alone that we are going after. As Lo mentioned we just hit 2 million. So, we've got less than 10% of that potential. In terms of the promotional activity, look by and large, the main guys were going up against. Our still focused on prepaid, but they do have 10% to 20% of their growth that comes in the form of the postpaid segment, and clearly some of the activity they have gave engaged them is not things that we would support from an economic standpoint and we stay true to what make sense for us. I let Lo and his vies on that.
Lo van Gemert - President and Chief Operating Officer
Yes, I mean, they obviously aside from giving the productive away. A lot of times this try to leave our customers in by giving them three to six to nine months free service. And this is something that we don’t do. So, while they are giving more and more minutes away, we are moving away from interconnect minutes and we are trying to serve more dispatch minutes and you will probably noticed that since the first quarter, we have actually moved our interconnect minutes per sub from to about 285 down to about 270, and we have reversed dispatch that actually has gone up from 275 to 290. So, now, we actually run more dispatch traffic, which by the way may have a negative impact on our ARPU, but has a positive impact on margin. That’s what we are about. So, what we are really trying to do is introduce a lot of the new rate plans with dispatch and then start adding minutes when usage grows up, and we have believe that’s the more appropriate strategy then just fight with interconnect minutes.
Richard Prentiss - Raymond James
Okay. And then on the seasonality, the weather impact of 10,000 to 15,000 hard to quantify, but kind of a shot at it. If we look at fourth quarter, seasonally, you lose a couple of weeks out there too. So, as we think towards third quarter going to fourth quarter, should we think about normalizing adding back in the weather, but then reducing kind of on the seasonally, losing a couple weeks?
Steven M. Shindler - Chairman and Chief Executive Officer
I don’t know there is a mathematical way to try to equate couple of storms versus the typical seasonally we face at the end of the year. We are? as we as we said we are all working hard towards the meeting the goal and meeting the numbers that we share with you in terms of our targets for this year. And given what we produced in third quarter, you can have a sense of what we trying to shoot for, albeit, including our expectation for not being able to sell much in the last two weeks of the year.
Richard Prentiss - Raymond James
Right. Final quick question for you. You have mentioned you still expect ?08 net adds to exceed ?07 net adds, having put the foundation in place and the network you rolled out. If we look at kind of country-by-country, there is still the ability to keep growing the adds in Mexico as well as Brazil, given the foundation you are putting there?
Steven M. Shindler - Chairman and Chief Executive Officer
Yes, in fact, that what my comment was specifically intended to, to address. Clearly, the largest investments we have made and the biggest opportunities we have are in Mexico and Brazil. We've put a lot of money behind those networks and our expansion. We're added a lot to our distribution channels and we continue to do that in all the markets, but particularly in those two countries and that’s where we expect the majority of the increase in growth to come from.
Richard Prentiss - Raymond James
It looks like a lot of profitable growth to come. Good luck guys.
Steven M. Shindler - Chairman and Chief Executive Officer
Thanks.
Operator
Our next question comes from Mr. Christopher King with Stifel Nicolaus.
Christopher King - Stifel Nicolaus & Company
Good morning guys.
Steven M. Shindler - Chairman and Chief Executive Officer
Good morning.
Christopher King - Stifel Nicolaus & Company
One quick question to? a follow-up on some of the promotional activity that’s been occurring in Mexico. You guys are obviously dealing with a couple of very well heeled large international competitors down there. What is your sense as to the timing of the promotional activity winding down? And what gives you, I guess, a level of comfort that these competitive offering won’t continue for the next several years in Mexico as there continues to be a kind of a land share grab there with wireless penetration levels still well below 60% in the country?
Lo van Gemert - President and Chief Operating Officer
Great question, Chris. And clearly one that we monitor and study carefully, in every single market. The honest answer is, we don’t know exactly how long it runs. But what we can do is talk about the experiences we've had in various other markets. We did go through with this, in an intensified way in Argentina several years ago. In Brazil, by and large, ending just around this time last year and towards the beginning of this year is when some of the activity began to pickup in Mexico. It could run for a couple of quarters. It could run for longer than that. That’s really more of a question in a strategic move by the competitors that you've referenced. But what we've done in each and every case is solidify our approach, make sure that we have the right rate plans, the right level of education. All the things that we do to drive, bringing in the right high quality customer, that’s how we produced outstanding results in the midst of that.
And if you look at Brazil, while there were certainly individual quarters where it was a little bit more difficult for us during that very competitive time, over the two year period we had a very significant increase in our ARPU, we had improvements in our churn, we had a lot of pickup in our growth rate in the subscriber additions that we brought on. And what we're looking at is this large opportunity of 20 million plus customers and how do we put ourselves in the best position to maintain the metrics first approach and bring in the right ones over time. So, yet to be seen, how long this activity sustains itself, we will be prepared if it goes on for a lengthy period of time. But we will be hopeful that it doesn’t have much longer to run.
Christopher King - Stifel Nicolaus & Company
Thank you. Also wanted to follow up real quickly, with respect to your share repurchase program with your stock down at these levels. I believe, you still have a couple of hundred million dollars more left in your current share authorization plan. How do you think about that, going forward?
Gokul Hemmady - Vice President and Chief Finance Officer
When we announced the convert as well as our initial buyback, we said our intention is to complete that program within a year or so. I think we’ll continue to evaluate whether that makes sense and if it does make sense at some point in the future, we will look at completing that program. As you know we announced $500 million. We did $250 million simultaneously with the convert and then in addition, we bought back about $80 million. But I’d also like to add there, that we look at all of these decisions in the context of maximizing our long-term value, and we continue to invest for growth, we continue to participate in spectrum auctions all of which are important to us. And in that context of maximizing long-term value, we will continue to evaluate returning capital back to our shareholders.
Christopher King - Stifel Nicolaus & Company
Thank you.
Operator
Our next question comes from Mr. James Breen with Thomas Weisel.
James Breen - Thomas Weisel Partners
Hello. You mentioned that the? there was an impact in Mexico where you delayed the rollout of the market there. I think we saw that last quarter and the quarter before. Can you talk about what the potential impact would have been from a net adds perspective given the size of that market? And then with churn in Mexico, the step up is that, will that come down now as you've kind of gotten through the storms and it would, was there some overall reaction from the churn, given the hurricane there? Thanks.
Lo van Gemert - President and Chief Operating Officer
No. The hurricane didn’t really have impact on churn and I would say that the market launch impact on net adds was negligible, I mean that wouldn’t explain necessarily the third quarter although there are a lot of people pumped up to basically open out that market. I would say that over all, when you look at the churn, going forward, any time you look at, you have also migration churn and you can have customers that basically move from your rate plan that they currently have, they can move down or they can move out. And we will not hold on to unprofitable customers if they are too demanding. So, sometimes there may be some leakage on that end just because of competitive forces. But we do everything we can to try and stick to our target market and try and re-educate our sales force and our distribution force, which we have done to talk about the benefits of direct connect and how we can save and so I still believe there’s a huge market out there and we just have to be very focused and penetrating the right market segment and if you do and you find the right customer, churn will be below 2%, far below our competitors.
James Breen - Thomas Weisel Partners
Thanks. And just one follow-up in Brazil. ARPU is good there and you are churn can came necessarily, but CPGA that step up quite a bit in the third quarter. Can you talk about the impact there?
Lo van Gemert - President and Chief Operating Officer
Yes, on a consolidated level, our CPGA did go up a little bit, and basically, we also have a recommitment from our indirect distribution force in Mexico to really pump up the overall loading and we commit themselves to some of our new markets where we are not necessarily achieving the share that we wanted. So a lot of these indirect distributors in the third quarter recommitted. They are getting incremental commissions from us to support the rollout of incremental gross adds to serve the new markets, which will help us in the long run. And that impact I think impacted our CPGA by about $9.
James Breen - Thomas Weisel Partners
Okay. Great. Thank you.
Operator
Our next question will comes from Mr. Walter Piecyk with Pali Capital.
Walter Piecyk - Pali Capital
Thanks. I just want to talk about the Renoko [ph] program, it looks like it was little light and obviously you know what the issue was in the? Nextel going into net editions I am guessing that program in part gets driven by your product. How good the price is, whether the customer is willing to resign up by given a new price? Is part of this sub? and plus also in Brazil, frankly, you didn’t really see strong seasonal growth as normal in the Q3, I mean it was fine, but I would expect a little more seasonal growth in Q3. Is it possible that all these issues are related to it sale product portfolio and some of the new products that you expect coming up, can have an impact here?
Steven M. Shindler - Chairman and Chief Executive Officer
Obviously, we are very focused on the product and as Lo mentioned in his comments, there is a lot that has come in and we are expecting to come here in the near-term from Motorola with new designs and a whole bunch of new handsets that have started to come in and will be coming in between now and in the middle part of next year. Some of that is timing issue. But as we sit here today looking at where we are with our product portfolio and what we need to achieve in the fourth quarter and going into the next year, we fully believe that we got the? the line up to meet our growth objectives and continue to provide high quality products and handsets to our customer base.
Walter Piecyk - Pali Capital
Do you think that was potentially an issue in this quarter? And addition to this some of the other things you have sighted in the press release?
Steven M. Shindler - Chairman and Chief Executive Officer
In terms of whether it impacted our specific growth or levels of investments, no, I don’t think that would be something that we would point to as a reason for?
Walter Piecyk - Pali Capital
So, with Renoko being down, if we look at that expense, it was down sequentially, is that just basically Telefonica or Aurorever [ph] maybe perhaps America Movil being more successful and taking those customers where previously you are able to retain them with that program?
Steven M. Shindler - Chairman and Chief Executive Officer
The Renoko was little bit down, because we took care of many of the customers also in the second quarter. So, it’s not that we are not trying to serve our customers better or that we can serve them because of the lack of the strength of our portfolio. So, there is no real problem in that area of Renoko.
Walter Piecyk - Pali Capital
Okay. Just two another questions. Lo, you had mentioned your Jack the commissions a little bit in Q3. So, presumably that should have an impact in CPGA going forward as well, correct?
Lo van Gemert - President and Chief Operating Officer
It depends how you look at it. If you want to Jack commissions up and you believe you don’t get incremental gross adds, it will increase. But the concept of increased commissions is increased growth, so we can normalize the CPGA impact.
Walter Piecyk - Pali Capital
Right. But maybe I misunderstand how commissions work, but if you are paying X dollars for gross adds and you paying X plus $9 for another gross adds, you need to get an incremental gross adds CPGA remains the same.
Lo van Gemert - President and Chief Operating Officer
Assuming the next stages, that is correct.
Walter Piecyk - Pali Capital
Okay. So, then wouldn’t we expect? wining by mix I am saying mix between the different countries?
Lo van Gemert - President and Chief Operating Officer
On direct and indirect.
Gokul Hemmady - Vice President and Chief Finance Officer
As also the different countries.
Lo van Gemert - President and Chief Operating Officer
Yes, but I am specifically talking about Mexico, I ma assuming. Yes.
Walter Piecyk - Pali Capital
Okay. And the last question is, share buyback you said 8 million? you bought about 1 million shares in addition to that initial deal on that transaction?
Lo van Gemert - President and Chief Operating Officer
That’s right.
Walter Piecyk - Pali Capital
I mean obviously Gokul you are talking very broad in terms about the share purchased activity. I am not sure why you can’t talk more specifically about the current environment, why you can’t say that, hey, yes we are going to be active, for example, tomorrow in buying the stock back or today? I just want to understand why you wouldn’t? why you have to say oh, we will evaluate this over 2008. I mean see where the stock is, you obviously feel confident about your business, why can’t you speak more gradually about what you are going to do about your share re purchase?
Gokul Hemmady - Vice President and Chief Finance Officer
Because I think, Walter, you will appreciate that we have to take several things into account as we think about the timing and several circumstances that we faced when we take decisions on the share re purchase program. We look at the share repurchase program as one tool of maximizing our long-term value. We look at many other things as I said investing in growth, looking at spectrum option and returning capital to shareholders as I have said is one thing that we will evaluate. When we?
Walter Piecyk - Pali Capital
Leverage ration is ridiculously low.
Gokul Hemmady - Vice President and Chief Finance Officer
Absolutely. And we do recognize that we have a lot of flexibility in our capital structure and we will use that flexibility to invest in growth to buy spectrum and to maximize long-term value and we will also invest, use that flexibility going forward to return capital to shareholders. We are not saying that we will be shy if circumstances warrant in the future, we will not be shy to increase our leverage and use our cash in any one of those three things that are, I talk about which is growth spectrum as well as returning capital to shareholders.
Walter Piecyk - Pali Capital
Unless you are going to spend $1 billion for spectrum, which I doubt any where near that and what you are looking for the leverage ratio is, and given where the stock is today I am not sure why you couldn’t be more specific about what you plan to doing share repurchase program?
Steven M. Shindler - Chairman and Chief Executive Officer
Well, I think as we have tried it to share with you, Wal, we are working towards achieving certain set of goals and objectives completing network bills, launching into new markets, looking up on upcoming option and we are mindful of the opportunity to do that and we are not saying that we are not going to be out actively in the market in a short period of time, but we don’t feel this is an appropriate place for us to dictate the strategy or to say very specifically when we will be out in the market find our shares .
Walter Piecyk - Pali Capital
Okay thank you.
Operator
Our next question comes from Mr. Marseille Fernandes with Merrill Lynch.
Marseille Fernandes - Merrill Lynch
Thank you. Good morning. Quick question yet on the prior promotional activity. Steve, you mentioned you want to solidify your position, your approach, we noticed some price cuts in specifically for HD in Mexico in the fourth quarter staring October. I just wanted to confirm if that’s really the case and whether that is true? Would expect any impact to APUR for? in the fourth quarter and if that’s really the strategy, the approach you are going to have to promotional activity and you have been mentioning particularly from Telefonica going forward not only this year, but going into 2008. Thank you.
Steven M. Shindler - Chairman and Chief Executive Officer
Well, I can? yes, we did introduce some plans in the fourth quarter and typically they were already kind of put together two months ago, they need to go through a regulatory through process in Mexico as you know. But there is a lot of excitement, a lot of choice in the market and we would like to be there with some of our product offerings and hope to grab some of these credit worthy customers. I mean that’s our goal and if I can pickup some of these opportunities and the customers and whether it is on interconnect or dispatch that’s what I want. There is good traction that we have and already some of these rate plans are proven? right now September part and October period, it’s creating traction and reversing third quarter. So, we're excited.
Marseille Fernandes - Merrill Lynch
Okay. That’s in terms of net adds I believe, Lo. But what about ARPU are we going to see ARPU’s down in the fourth quarter, because of that?
Lo van Gemert - President and Chief Operating Officer
Well, when you talk about the opportunity in Mexico, we, there’re 20 million businesses and we just hit two million. So, we only have about 10% share. I don’t believe that, at this point of time the only addressable market is the down market. So, we will do whatever we can to make the right business decision and that will, not just impact, positively or negatively ARPU, but also, margin, churn, etc, etc. But, we will do? make sure that, that the metrics that we are going to generate in fourth quarter makes sense for the long term business that we believe is really very good.
Marseille Fernandes - Merrill Lynch
Okay. Thank you.
Operator
Our next question comes from Brett Feldman with Lehman Brothers
Brett Feldman - Lehman Brothers
Hi, I just take in a question, just to clarify comments about the new price that you guys are looking at in Mexico. I think we all understand that here, dispatch traffic is significantly more profitable in unique connect traffic. When you go with plans that lead with the dispatch and you are giving up a little bit on the ARPU, what is that ARPU margin trade off. In other words, are you still going to get roughly the same net hours out of a customer or is it a strategy to start off and hook them on ?push or talk? and then up sell them on interconnect and we're just trying to get them to the same one rate monthly cash flow per customer level. You understand the question?
Lo van Gemert - President and Chief Operating Officer
Yes. No, I?that’s exactly what we been and I think Nextel in the old days did. Where you typically sell, sold dispatched and then you try and sell interconnect and that’s how to get to incremental auto [ph] and as I said before, that some of the new markets that we introduced, we try to lead it in dispatch. But if you are the first dispatch user for instance in a specific city, its hard to get, to get traction. So, we may have to lead in with more interconnect centric rate plans to end competitive and then once they start using more than two or three hundred minutes, I move them into a dispatch plan. So, it depends on the market that we’re serving. But you are 100% right.
Brett Feldman - Lehman Brothers
Okay. And then on different topic, when you were getting at before about preserving capitals for investments, may be you could just give us your expectation right now about some of the options that are coming up. What is your sense on timing and then when you look at your spectrum portfolio, what do you want and what do you need? It seem you have a pretty good portfolio to support you're existing iDEN business. Would you like to have more to support iDEN and then when you think longer-term do you see any holes in your spectrum portfolio.
Lo van Gemert - President and Chief Operating Officer
Yes. That’s a great question and in terms of the 800 Megahertz spectrum that we have on the SMR band we have an abundance of spectrum to certainly achieve the growth objective that we have for our company for the foreseeable future feature going on five plus years, we are always looking for incremental amounts of that same spectrum, however, because there is a trade off on capital efficiency and the more spectrum we have and the fewer sites that we need to deploy and it’s a very straight forward payback analysis for us to do, based on the price of that spectrum. Outside of that, you’ve seen us participate in a couple of auctions or purchase different bands of spectrum typically at higher bandwidth and what we’ve done with that is be opportunistic. We are well aware that there is other potential revenue streams that may be available to us in the future as broadband grows around the world, not so much yet in our region. But if it does come or we believe that there’s an opportunity to as we talk about build value for the long-term, then getting access to that raw material now and having ability to build upon it later we think is a prudent strategy. Last quarter we participated in an auction in Peru, we won 35 Megahertz nationwide at 1.9 gig for $27 million. We have opportunities like that, that continue to come along in our other markets. We think that those are? that’s money well spent and we can build value upon that investment. There’s auctions coming up in both Brazil and Mexico at similar frequency bands and you should expect, that we are going to take a look at participating in those.
Brett Feldman - Lehman Brothers
Okay. And then just one final question. You’ve talked previously about looking for interesting way to expand your footprint into adjacent markets, maybe not necessarily by talking in retail presence there, but by creating sort of a roaming presence for your customers in your full market. Can you give us an update on where you are with that. And then, I am curious weather you think that Columbia is an opportunity for you now that the income iDEN operator is able to interconnect calls in that market.
Lo van Gemert - President and Chief Operating Officer
Sure it is an opportunity, its one that we’ve continued to look at. Roaming for us is certainly an important feature to be able to offer to our customers. At this particular point in time, its not a large percentage of the revenue that we generate but clearly we want to make that available to the entire subscriber base and as we continue to grow that base we hope that that appeal to a larger and larger percentage of our customers.
Brett Feldman - Lehman Brothers
Thanks guys.
Steven M. Shindler - Chairman and Chief Executive Officer
Josh, I think that all the time we have for today, I think to our hour. So I think we will end there.
Operator
This concludes the NII Holding third quarter 2007 earnings conference. Thank you for your participation.
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