"In contrast to the cellular market, we in the Internet services provider (ISP) market are not raising prices. The improvement in our results is due to internal streamlining. I can't explain why our prices are stable while cellular prices are going up, even though the pricing structure and number of players is similar. I believe that the entry of cellular operators into the ISP market should be balanced by allowing the entry new cellular operators in the form of mobile virtual network operators (MVNO)," said 012 Smile CEO Stella Handler yesterday.
012 Smile.Communications Ltd. (Nasdaq:SMLC; TASE: SMLC) yesterday published its financial report for the third quarter. Despite reporting record quarterly revenue and earnings before interest, taxes, depreciation and amortization (EBITDA), the share fell 22.4% on Nasdaq yesterday to $4.69, giving a market cap of $119 million. The share fell 5.2% by midday on the TASE today to NIS 18.
Smile updated its guidance to reach 100,000 voice-over-broadband (VoB) telephony subscribers by the end of 2008, from its previous guidance of 90,000. The company announced that it had 85,000 subscribers at the end of September.
Handler cautioned, "As is prudent in today's global economic environment, we have adopted an even more cautious approach towards expenses and investments. Nonetheless, we continue to prepare for a future entry into Israel's mobile market, a direction we believe has the potential to take our company to the next level."
Smile posted NIS 282 million ($82 million) revenue for the third quarter, 1% more than for the corresponding quarter of 2007, and 7% higher than for the preceding quarter. The company attributed the increase to a 14% increase in revenue from broadband services, which offset a 35% drop in low-margin hubbing services and the fall in the shekel-dollar exchange rate.
Smile posted a net profit of NIS 12.5 million ($3.7 million) (NIS 0.49 and $0.15 per share) for the third quarter, up from NIS 12.3 million for the corresponding quarter.
Smile parent company, Internet Gold Golden Lines Ltd. (Nasdaq: IGLD; TASE:IGLD), a unit of Shaul Alovitz's Eurocom Group, fell 7% on Nasdaq yesterday to $4.90. The share fell 5.5% to NIS 18.16 by midday on the TASE today.
Published by Globes [online], Israel business news - www.globes-online.com - on November 13, 2008
© Copyright of Globes Publisher Itonut (1983) Ltd. 2008