Bezeq Israeli Telecommunication Co. Ltd. (TASE: BEZQ) mobile carrier subsidiary Pelephone Communications Ltd. reports that revenue from value added services rose 21% to NIS 297 million for the second quarter, amounting to 34.5% of total revenue, thanks to increased smartphone use and the related sales of Internet surfing packages.
Total revenue rose 0.6% to NIS 1.44 billion from NIS 1.43 billion for the corresponding quarter. Net profit rose 4.5% to NIS 279 million for the second quarter from NIS 267 million for the corresponding quarter, despite a 1.4% drop in operating profit to NIS 357 million from NIS 362 million.
Increased handset sales, especially for smartphones, boosted equipment revenue 77.5% to NIS 513 million for the second quarter from NIS 289 million for the corresponding quarter, but service revenue fell 19% to NIS 925 million from NIS 1.14 billion. The company attributed the drop in to lower tariffs caused by stronger competition.
Cash flow from operations fell 73.3% to NIS 101 million from NIS 378 million, and free cash flow (net of capital expenditures) fell 94.3% to NIS 15 million from NIS 264 million. The company attributes the drop to higher smartphone and iPhone sales, which resulted in higher payments to suppliers, while most customers pay by 36-month installment plans.
Pelephone added 11,000 net new subscribers during the second quarter, bringing the number of active subscribers to 2.89 million at the end of June, 3% more than the 2.81 million a year earlier. The company had 1.61 million 3G subscribers.
Average revenue per user (ARPU) fell to NIS 107 per month in the second quarter from NIS 111 in the corresponding quarter, due to the reduction in mobile termination fees. Average monthly minutes of use (MOU) per customer rose to 365 minutes from 348 minutes in the corresponding quarter.
Published by Globes [online], Israel business news - www.globes-online.com - on August 2, 2011
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