Bezeq says Internet trumps phone services for first time

Bezeq Israel Telecom, Israel’s largest telecoms group, on Thursday reported a smaller-than-expected drop in second-quarter profit as it faces up to tougher competition. Revenue from its Internet service led the way for the first time, it said.

Bezeq, a state-run phone monopoly until a decade ago, has been battling new competitors in many of its markets.

Its cellular phone unit, Pelephone, which has been struggling to match the cutthroat rates of smaller operators, was hit particularly hard in the quarter and saw its net profit plummet 73.5 percent to NIS 13 million.

Pelephone’s subscriber base slid to 2.26 million from 2.692 million at the end of March.

This was partly offset by Bezeq’s Internet services and transmission and data communication services.

Bezeq has been testing G.fast and other fiber-optic technologies that will enable Internet surfing speeds of up to 1 gigabit per second – 10 times the 100 Mbps top speed Bezeq currently offers.

Bezeq added 18,000 broadband Internet lines in the second quarter, bringing its total to 1.52 million.

Bezeq earned NIS 377 million ($98.5m.) in the second quarter, down from NIS 482m. a year earlier. Revenue fell to NIS 2.5b. from NIS 2.6b. in the same period in 2015.

Bezeq was forecast in a Reuters poll to post revenue of NIS 2.5b. and net profit of NIS 357m. (Reuters)