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JERUSALEM, May 24 (Reuters) - 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