Israel's Bezeq Telecom sees fibre-optics, 5G driving growth

The logo of Bezeq Israel Telecom is seen outside its headquarters in Tel Aviv, Israel June 21, 2017. REUTERS/Amir Cohen/File Photo

JERUSALEM, Aug 10 (Reuters) - Bezeq Israel Telecom (BEZQ.TA) said rapid fibre optics and mobile 5G network rollouts would continue to drive growth as home telephone use tails off.

Bezeq currently reaches more than 1.36 million households with its fibre network and as of the end of June had 180,000 customers for its fibre service. It said it had a record number of new subscribers in July.

It aims for 1.5 million homes to have fibre access by year-end and for 2.2 million - 82% of the country - in the coming years.

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"We are running faster than we planned," Bezeq Chairman Gil Sharon told Reuters on Wednesday after Israel's largest telecoms group issued second-quarter financial results.

Bezeq's broadband internet revenue grew 10% in the second quarter to 443 million shekels ($135 million), while telephony revenue dropped 17.5% to 189 million.

"As more fibre comes into play, Internet will continue to go up and compensate," Sharon said.

Smaller rivals Cellcom (CEL.TA) and Partner Communications (PTNR.TA) are also deploying their own fibre networks.

A total of 1.6 million households have access to fibre and there are 670,000 subscribers, according to the Communications Ministry.

Bezeq said it earned 310 million shekels ($93 million) in the second quarter excluding one-time items, compared with 304 million shekels a year earlier and 293 million forecast in a Reuters poll of analysts. Revenue gained 1.1% to 2.23 billion shekels.

Bezeq said it intended to pay a dividend for the first half of 294 million shekels, or 0.11 shekel per share, in October - 50% of first-half net profit.

Its shares were up 2.1% in afternoon trading in Tel Aviv.

Last week, Bezeq raised its estimate for adjusted 2022 net profit to 1.1-1.2 billion shekels from a prior forecast of 1.0-1.1 billion. read more

Bezeq was helped by a 130% rise in net income at mobile phone unit Pelephone as its subscriber base grew. Sharon said Pelephone is able to sell 5G packages at higher prices.

($1 = 3.2877 shekels)

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Reporting by Steven Scheer;Editing by Elaine Hardcastle

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