TEL AVIV, May 22 (Reuters) - Partner Communications , Israel’s second-largest mobile phone operator, posted a 79 percent drop in first-quarter net profit as the company faces increased competition and an erosion in prices.
Net profit fell to 31 million shekels ($8.5 million) from 146 million a year earlier as revenue dropped 27 percent to 1.144 billion shekels, Partner said on Wednesday.
The company was forecast in a Reuters poll of analysts to earn 64 million shekels on revenue of 1.174 billion.
Israel’s mobile phone industry was shaken up last year with the entry of six new operators, sparking a price war - with unlimited calling plans for $25 a month or lower.
“The results for the first quarter of 2013 reflect the continuing impact of the fierce competition in the telecommunications market, as reflected in the significant price erosion and decline in the company’s revenues,” Partner Chief Executive Haim Romano said in a statement.
Despite the decline in revenue and profit, Partner continues to invest in its assets, he said. Investments in the first quarter totalled 130 million shekels, mainly in the advanced cellular network.
The company reduced its operating expenses by 17 percent in the quarter, reflecting efficiency measures undertaken over the last four quarters, especially the reduction in the workforce of approximately a third.
“The efficiency measures that we are implementing continue; however they are not yet fully reflected in the company’s results,” Romano said.
Its subscriber base fell 7 percent from a year earlier to 2.93 million.
Cellcom, Israel’s biggest mobile phone operator, had reported a 61 percent drop in first quarter net profit and a 20.6 percent decline in revenue.
Pelephone, a unit of Bezeq Israel Telecom, earlier reported a 29 percent drop in quarterly profit and 22.5 percent fall in revenue.