Cellcom’s 4Q profit slips, but TV services gain

Cellcom, Israel’s largest mobile operator, reported a steeper-than-expected 26% drop in quarterly profit due to intense competition in the sector. But it said rising revenues from its new TV service cushioned the fall.

Cellcom said on Wednesday it earned NIS 14 million ($3.8m.) in the fourth quarter, down from NIS 19m. a year earlier. Revenue slipped 5.9% to NIS 984m.

The company, the first of Israel’s telecom firms to issue quarterly results, was forecast to earn NIS 17m. on revenue of NIS 984m., according to a Reuters poll of analysts.

Israel’s cellphone 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,” CFO Shlomi Fruhling said.

Cellcom’s mobile subscriber base dipped 1.2% in 2016 to 2.801 million.

Last week, the Israel Antitrust Authority approved the $91m. purchase of smaller rival Golan Telecom to Electra Consumer Products. As part of the deal, Golan will pay Cellcom at least NIS 210m. a year plus value-added taxes to use its network.

Cellcom’s main rivals, Partner Communications and Pelephone, a unit of Bezeq Israel Telecom, will publish fourth-quarter results later in March. (Reuters)