Cellcom cites competition as revenue, EBITDA, net income decline in 1Q18

31 May 2018

Israel’s Cellcom has published its financial results for the first quarter of 2018, reporting declines in its key metrics, with revenues, operating income, EBITDA and net profit all falling year-on-year. In the three months ended 31 March 2018 Cellcom generated a total turnover of ILS933 million (USD265 million), down 2.7% from ILS959 million in 1Q17, with service revenues declining by 5.1% y-o-y to ILS701 million. Service revenues in the cellular sector totalled ILS437 million in 1Q18, down by more than 14% from ILS509 million in the corresponding period of 2017, with Cellcom attributing this to ‘the ongoing erosion in the price of these services as a result of the competition in the cellular market’, as well as to ‘the difference between the national roaming services revenues in the first quarter of 2017 and the revenues for rights of use in cellular networks according to [its] network sharing agreement with Golan Telecom’. Service revenues in the fixed line sector, meanwhile, stood at ILS304 million in the period under review, representing a 9% increase – resulting in part from an increased uptake for services provided under its network sharing agreement with Golan.

Cellcom’s operating income for the first quarter of 2018 slumped by 32.8% y-o-y to ILS45 million, while EBITDA fell by 10.4% to ILS180 million, with an increase in fixed line EBITDA (up 61.9% to ILS68 million) failing to fully offset a 29.6% drop in cellular EBITDA (to ILS112 million). Net Income for the opening three months of this year totalled ILS7 million, compared to ILS27 million in 1Q17. First-quarter CAPEX stood at ILS146 million, up marginally from ILS140 million in the corresponding period of 2017.

In operational terms, at 31 March 2018 Cellcom was serving 2.822 million mobile subscribers, up from 2.792 million a year earlier, although monthly ARPU was down roughly 16%, standing at ILS51.8, compared to ILS60.2 in 1Q17. Internet infrastructure customers, meanwhile, numbered 235,000 at the end of March 2018, up from 173,000 a year earlier.

Israel, Cellcom