JERUSALEM, May 30 (Reuters) - An ongoing price war hit Cellcom’s first quarter net profit, despite growth in the fixed line business of Israel’s largest mobile operator.
Cellcom shares fell 5.7 percent to 23.82 shekels in Tel Aviv on Wednesday after it said it made 7 million shekels ($2 million) in the quarter, a 73 percent drop from a year earlier, while revenue slipped 2.7 percent to 933 million shekels.
Israel’s mobile phone industry was shaken up in 2012 with the entry of a host of new operators, sparking a price war that led to steep drops in subscribers, revenue and profit for Cellcom and rival incumbents Partner Communications and Pelephone, a unit of Bezeq.
They have seen their mobile market share chipped away by new companies like Golan Telecom and Hot Mobile, as well as a number of virtual mobile operators.
Cellcom launched a lower-cost internet-based TV service in 2015 that it says has garnered 184,000 subscribers, up 48 percent from a year earlier. It also has 235,000 customers for its internet services, a 36 percent rise from a year ago.
“Alongside the continued competition in the cellular segment, we continued to recruit new customers, among others, through a quatro package that offers cellular, television, internet and fixed line home telephony,” Cellcom Chief Executive Nir Sztern said.
Cellcom’s mobile subscriber base gained 1.1 percent to 2.822 million in the first quarter.
Sztern said the company was still deploying a fibre-optic network to customers’ homes, which is meant to provide Internet speeds of up to 1 gigabit.
Cellcom was considering investing in Israel Broadband Company (IBC), which would allow for a further acceleration of the fibre-optic network, he added. ($1 = 3.5811 shekels) (Reporting by Ari Rabinovitch Editing by Steven Scheer and Alexander Smith)