JERUSALEM, March 15 Cellcom, Israel's
largest mobile operator, reported a steeper than expected 26
percent drop in quarterly profit due to intense competition in
the sector, but said rising revenues from its new TV service
cushioned the fall.
Cellcom said on Wednesday it earned 14 million shekels
($3.8 million) in the fourth quarter, down from 19 million a
year earlier. Revenue slipped 5.9 percent to 984 million
The company, the first of Israel's telecoms firms to issue
quarterly results, was forecast to earn 17 million shekels on
revenue of 984 million, according to a Reuters poll of analysts.
Israel's mobile phone industry was shaken up in 2012 with
the entry of a host of new operators, sparking a price war that
led to steep drops in subscribers, revenue and profit for
Cellcom and two incumbent rivals.
Cellcom in 2015 launched a lower-cost Internet-based TV
service that it said has garnered 122,000 subscribers to date.
It also has 180,000 customers for its internet services.
"The increase in revenues from the Internet and TV fields
was partially offset by a decrease in revenues from long
distance calling services," said CFO Shlomi Fruhling.
Cellcom's mobile subscriber base dipped 1.2 percent in 2016
to 2.801 million.
Last week, Israel's anti-monopoly regulator approved the $91
million purchase of smaller rival Golan Telecom to Electra
Consumer Products. As part of the deal, Golan will pay
Cellcom at least 210 million shekels a year plus value added
taxes to use its network.
Cellcom had previously signed a network sharing and hosting
agreement with Marathon 018 Xfone, a telecoms firm which was
awarded fourth generation frequencies in a 2015 tender but which
has yet to enter the cellular market.
"Signing the network sharing agreements with Electra
Consumer Products (Golan) and Xfone 018, will ensure revenues
while reducing investment to the group over the coming decade,"
said CEO Nir Sztern.
Cellcom's main rivals, Partner Communications and
Pelephone, a unit of Bezeq Israel Telecom, will
publish fourth-quarter results later in March.
($1 = 3.6596 shekels)
(Reporting by Steven Scheer, editing by Louise Heavens)