TEL AVIV May 14 Cellcom, Israel's
largest mobile phone operator, reported a 70 percent jump in
quarterly profit due in part to cost-cutting measures
implemented as the company faced intensified competition.
Net profit rose to 114 million shekels ($33 million) in the
first quarter from 67 million a year earlier, Cellcom said on
Wednesday. Revenue dipped 10.2 percent to 1.13 billion shekels.
Cellcom was forecast to earn 86 million shekels on
revenue of 1.18 billion, according to a Reuters poll.
The company's selling, marketing, general and administrative
expenses fell 15.6 percent in the quarter due to efficiency
measures, which led to a decrease in payroll and other expenses.
Finance costs fell 41 percent due to a drop in interest
Israel's mobile phone industry was shaken up in 2012 with
the entry of six new operators, sparking a price war that led
to steep drops in subscribers, revenue and profit at Cellcom and
two incumbent rivals.
"We expect the price erosion and high competition to
continue in the coming quarters while the company's ability to
continue implementing efficiency measures to mitigate the
decrease in revenues will be reduced," Cellcom Chief Executive
Nir Sztern said.
Cellcom said it would not pay a dividend for the first
quarter given the continued intensified competition in the
market and its adverse effect on the company's revenue.
"The board of directors will re-evaluate its decision as
market conditions develop and taking into consideration the
company's needs," Cellcom said.
In the third quarter Cellcom paid a quarterly dividend of 85
million shekels but did not pay one for the fourth quarter.
Sztern said Cellcom was preparing for a quick launch of a 4G
network supporting LTE advanced technology.
Cellcom had 3.049 million subscribers at the end of the
first quarter, down 3.7 percent from a year ago.
($1 = 3.4565 Israeli Shekels)
(Reporting by Tova Cohen)