Cellcom Q2 net profit, revenue fall

TEL AVIV (Reuters) - Israel's largest mobile phone operator Cellcom <CEL.TA (CEL.N) posted lower second-quarter net profit that missed forecasts due to regulatory changes and increased competition.

Net income fell to 244 million shekels ($69 million) or 2.45 shekels per share from 326 million shekels or 3.30 shekels a share a year earlier, Cellcom said on Monday.

Revenue fell 6 percent to 1.59 billion shekels.

Cellcom was forecast to earn 266 million shekels on revenue of 1.56 billion, according to a Reuters poll of five analysts.

The company's subscriber base edged up 0.7 percent to 3.367 million at the end of June with subscribers to its lucrative third-generation network amounting to 1.22 million.

"In the second quarter of 2011, we saw a strong impact of the regulatory changes that came into effect at the beginning of the year and impacted our results in the magnitude previously expected and reported," Chief Executive Amos Shapira said.

"At the same time, we took additional measures in the fields of customer service and pricing plans, to better address the current market conditions."

The company declared a dividend for the second quarter of 2.33 shekels a share or a total of 232 million shekels.

($1 = 3.54 shekels)

(Reporting by Tova Cohen; Editing by Erica Billingham)