* Q3 net profit 342 mln shekels vs 403 mln forecast
* Revenue down 15 percent to 2.49 billion shekels
* Sees 2012 revs 10.2-10.5 bln shekels, profit 1.75-1.85 bln
(Adds details, CFO comment)
By Steven Scheer
JERUSALEM, Nov 7 Bezeq Israel Telecom,
Israel's largest telecoms group, reported a 38 percent drop in
quarterly profit that missed estimates, as its mobile phone unit
continues to suffer from intense competition.
Israel's mobile phone industry was turned upside down this
year with the entry of six new operators, sparking a price war -
with unlimited calling plans for around $25 a month - and
leading to many customers switching companies.
"Our group performance was significantly influenced by
comprehensive regulatory changes and intensifying competition...
particularly in the cellular segment," Chief Financial Officer
Alan Gelman said.
Three operators, including Bezeq unit Pelephone, had
dominated the sector for more than 12 years until regulatory
changes at the start of 2011 forced providers to slash the fees
operators charge each other to connect calls and to scrap exit
fines for customers, hurting revenue and earnings.
Bezeq said on Wednesday it earned 342 million shekels ($88
million) in the third quarter, down from 550 million a year ago.
Revenue slipped 15 percent to 2.49 million shekels and earnings
before interest, taxes, depreciation and amortisation dropped 21
percent to 1.03 billion shekels.
The company was forecast in a Reuters poll to make profit of
403 million shekels, with EBITDA of 1.05 billion and revenue of
2.49 billion shekels.
Pelephone, Israel's third-largest mobile operator, saw its
quarterly profit slide 41 percent to 154 million shekels, with
its revenue down 26 percent. Its subscriber base edged down 0.1
percent to 2.839 million.
Rivals Cellcom and Partner Communications
will issue their results later this month and are expected to
have suffered the same fate due to the spike in competition.
Bezeq affirmed its 2012 outlook of revenues of 10.2-10.5
billion shekels, EBITDA of 4.4-4.5 billion and net profit of
1.75-1.85 billion shekels. It said free cash flow would improve
materially this year and exceed 2.5 billion shekels.
(Additional reporting by Tova Cohen; Editing by Mike Nesbit)