JERUSALEM May 24 Cellcom, Israel's
largest mobile operator, reported on Wednesday a 56 percent drop
in first quarter net profit due to intense competition, though
it saw growth in its new TV service.
Cellcom said it earned 26 million shekels ($7 million) in
the quarter, down from 59 million a year earlier. Revenue
slipped 6.2 percent to 959 million shekels.
The company was forecast to earn 27.5 million shekels on
revenue of 946 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 says has garnered 124,000 subscribers to date.
It also has 173,000 customers for its internet services.
"In the cellular segment, we experienced continued high
level of competition which reflected in a continued erosion of
service revenues from customers. In addition, we recorded a
decrease in revenues from national roaming services," said Chief
Financial Officer Shlomi Fruhling.
Cellcom's mobile subscriber base slipped 0.7 percent to
2.792 million in the first quarter.
The company received in the quarter approvals for a network
sharing agreement with smaller rival Golan Telecom worth 2
billion shekels over 10 years, which it said would be reflected
gradually starting in the second quarter.
One of Cellcom's main rivals, Partner Communications
, reported a rise in first quarter profit despite a
decline in its subscriber base. A second rival, Pelephone, a
unit of Bezeq Israel Telecom, saw its profit and
subscriber base increase.
($1 = 3.5916 shekels)
(Reporting by Ari Rabinovitch; Editing by Mark Potter)