Cellcom's improved fixed turnover fails to fully offset lower mobile service revenue in FY17

27 Mar 2018

Israel’s Cellcom has published its financial results for the year ended 31 December 2017, reporting declines in all key indicators for the period under review as competition in the mobile segment continued to impact its performance. Cellcom generated a total turnover of ILS3.87 billion (USD1.12 billion) in FY 2017, down 3.9% from the ILS4.03 billion it reported for FY 2016, with service revenues standing at ILS2.92 billion, down from ILS3.03 billion. Service revenues in the cellular segment totalled ILS1.93 billion, down 10.8% year-on-year, attributed mainly to the ongoing erosion in the price of such services and the result of ‘the difference between the national roaming services revenues in 2016 and the revenues for rights of use in cellular networks according to a network sharing agreement with [rival provider] Golan Telecom’, which came into force in 2Q17. Service revenues in the fixed line sector were up, however, increasing by 8.9% in FY 2017 to ILS1.17 billion, buoyed by improved turnover from TV and internet services, and fixed line communications services provided as per the terms of the network sharing agreement with Golan. Meanwhile, full-year operating income stood at ILS297 million, down 4.2% y-o-y, while EBITDA was broadly unchanged at ILS853 million. Net income, meanwhile, was ILS113 million, representing an annualised decline of 24.7%.

In operational terms, at the end of December 2017 Cellcom had 2.817 million mobile subscribers on its books, up marginally from 2.801 million a year earlier, though monthly cellular ARPU was almost 10% lower at ILS57.1, compared to ILS63.3 million in 2016. Meanwhile, in the fixed line segment Celcom reported a total of 222,000 ‘internet infrastructure’ customers, representing a 42.3% y-o-y increase, with pay-TV accesses climbing by 53.2% to 170,000 at end-2017.

Commenting on the company’s performance, Shlomi Fruhling, Cellcom’s chief financial officer, said: ‘2017 was characterised by accelerated growth in the fixed line segment and continued competition in the cellular segment, as expressed in the erosion of revenue from services as compared with last year.’

Israel, Cellcom