Competition dents Bezeq revenues again in 3Q14

11 Nov 2014

Israeli fixed line incumbent Bezeq saw total turnover decline by almost 7% in the three months ended 30 September 2014, with the drop said to be primarily related to lower revenues from both mobile and fixed voice services. Total revenues for the quarter under review stood at ILS2.232 billion (USD637 million), down from ILS2.398 billion. Fixed line turnover reached ILS1.08 billion in 3Q14, down by 4.4% year-on-year, with the reduction attributed to lower telephony revenues which were significantly impacted by lower fixed call termination rates. In the wireless sector, meanwhile, Bezeq recorded total revenues of ILS824 million, down from ILS947 million in 3Q13, with cellular service turnover standing at ILS610 million, representing a 14.1% y-o-y decline. Such a reduction, it noted, was primarily due to tariff erosion resulting from increased competition in the sector and ‘the transition of existing customers to lower-priced plans in line with existing market prices’.

Group earnings before interest, tax, depreciation and amortisation (EBITDA), meanwhile, totalled ILS998 million in the third quarter of 2014, down from ILS1.05 billion in the corresponding period a year earlier. Net profit for the period under review was ILS428 million, down from ILS449 million.

As at the end of September 2014 Bezeq had 2.205 million fixed lines in service, down only marginally from 2.223 million a year earlier, but notably unchanged quarter-on-quarter. Fixed broadband accesses meanwhile stood at 1.335 million, up from 1.230 million. Mobile accesses continued to decline, however, to 2.600 million, representing a 3.1% decline from 2.683 million a year earlier, and a 0.4% drop against the previous quarter.

Commenting on the results, Bezeq chairman Shaul Elovitch said: ‘Our substantial investments in infrastructure, technology, and state-of-the-art products are bearing fruit, positioning the Group as the provider of choice for Israeli consumers.’ Chief financial officer David Mizrahi meanwhile added: ‘We are again posting strong group financial results and are on track to achieve our aggressive financial targets for the year 2014.’