JERUSALEM Aug 11 Cellcom, Israel's
largest mobile phone operator, reported an 18 percent rise in
second-quarter net profit, due to cost-cutting aimed at
offsetting fierce competition.
Net profit rose to 79 million shekels ($22.8 million), just
ahead of the 76 million forecast in a Reuters poll of analysts.
Revenue fell 6.3 percent to 1.158 billion shekels compared
with 1.12 billion in the poll, although equipment revenue grew.
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.
Cellcom said it subscriber base fell by 20,000 in the second
quarter to 3.03 million.
Last week, rival Pelephone - a unit of Bezeq Israel Telecom
- posted a 34 percent drop in quarterly profit.
Cellcom last month launched its 4G LTE network and said it
was also deploying a faster 4.5G network. At the same time, it
is preparing for the launch of TV over the Internet as an
alternative to cable or satellite TV.
Cellcom noted that it expects a temporary but substantial
decrease in revenue from national roaming services until the
approval of a network sharing agreement with smaller rival Golan
The board decided not to distribute a quarterly dividend for
the third straight quarter given the tough competition and its
impact on revenue.
Cellcom recorded a one-time expense of 39 million shekels
from a voluntary retirement plan that led to the retirement of
380 workers. The savings in payroll are expected to be seen as
early as the third quarter, it said.
Partner Communications is slated to report results
later this week.
(1 US dollar = 3.4678 Israeli shekel)
(Reporting by Steven Scheer; Editing by Erica Billingham)