Cellcom points to impact of cellular competition as revenues fall in 3Q17

23 Nov 2017

Citing continued competition in the Israeli cellular sector, Cellcom has reported a total turnover of ILS975 million (USD276 million) for the quarter ended 30 September 2017, down from ILS992 million a year earlier. Revenues from its mobile operations accounted for the lion’s share of that figure, standing at ILS679 million, but this represented an annualised decline of 6.9%, as cellular service revenues fell 8.6% year-on-year to ILS488 million. More positively, in terms of fixed line revenues, Cellcom generated ILS339 million from this sector, up from ILS315 million in 3Q16, which it attributed to increased TV and broadband infrastructure customer numbers. EBITDA in 3Q17 was ILS226 million, up 8.1% against the ILS209 million reported in the year earlier period, with the company’s EBITDA margin rising from 21.1% to 23.2%. Operating income was also up, at ILS83 million, compared to ILS73 million. However, net profit for the period under review was marginally lower than last year, totalling ILS32 million, down from ILS33 million.

In operational terms, at the end of September 2017 Cellcom had a mobile subscriber totalling 2.805 million, down from 2.822 million a year earlier, with a churn rate of 11.5% for the third quarter of 2017 (3Q16: 10.5%) and monthly ARPU falling to ILS57.8, from ILS62.8. Internet infrastructure subscriber numbers continued to increase, however, reaching 206,000 at the end of September 2017, up from 146,000 a year earlier. Pay-TV accesses meanwhile increased to 154,000, up from 99,000 at end-September 2016.

Commenting on the quarterly performance, Cellcom’s chief executive Nir Sztern said: ‘The influence of the competition is reflected in the cellular segment results; however, our varied activities as a telecommunications group in the fixed line segment are bearing fruit and partially compensated for the cellular segment results.’

Israel, Cellcom