Israel’s Cellcom has reported a total turnover of ILS892 million (USD250 million) for the first quarter of 2020, down 3.9% against the corresponding period a year earlier. Service revenues were up marginally, however, rising 0.6% year-on-year to ILS682 million in 1Q20, with a 3.2% increase in fixed sector service revenues, to ILS327 million from ILS317 million, more than offsetting a 2.0% annualised drop in mobile service revenues to ILS396 million. According to Cellcom the lower mobile service revenues were mainly due to ‘[a] decrease of the company’s roaming services activities as a result of the coronavirus crisis and the ongoing erosion in the cellular prices as a result of the intense competition’.
Meanwhile, the carrier reported an adjusted EBITDA of ILS244 million for January-March 2020, representing an 8.9% increase against the ILS224 million recorded in 1Q19, positively impacted by ILS28 million as a result of a retrospective update of Bezeq’s wholesale market tariffs by Israel’s Ministry of Communications, partially offset by the negative impact of the COVID-19 pandemic. Operating income for 1Q20 increased by 100% y-o-y, to ILS18 million, while Cellcom recorded a net loss of ILS43 million in the fiscal first quarter, compared to a net loss of ILS16 million in the corresponding period of 2019.
In operational terms, as at 31 March 2020 Cellcom was serving a total of 2.747 million mobile subscribers, down from 2.853 million a year earlier, with monthly cellular average revenue per user (ARPU) standing at ILS48.1 (1Q19: 47.2). In the fixed line sector, Cellcom reported a total of 279,000 ‘internet infrastructure’ customers, broadly unchanged from the 278,000 it had a year earlier, while pay-TV subscriber numbers continued to rise, reaching 246,000 (1Q19: 227,000).
Commenting on the quarterly performance, Cellcom’s chief financial officer, Slomi Fruhling, said: ‘The first quarter of 2020 has been characterised by continued competition in the mobile sector while the fixed line sector continued to grow. Quarterly results were partially affected by the [COVID-19] pandemic. We expect a greater impact to be seen in the second quarter, and we expect the crisis to continue to adversely affect the company’s results through this year.’