Hot Mobile leads recruitment but churn rate high

Hot Mobile beat Golan Telecom by 1,400 net subscribers gained in April.

April 2013 was a good month for Hot Mobile Ltd., which gained the largest number of new subscribers for the month, but in the important item of net new subscribers, it surpassed Golan Telecom Ltd. by just 1,400 subscribers. Analysis of the figures again highlights the problem of the company's high churn rate, which it is apparently unable to solve.

In April, Hot Mobile recruited 21,855 subscribers from other carriers, but lost 15,245 subscribers; 70% of its recruitment rate. Golan Telecom Mobile recruited 10,562 subscribers from other carriers, but lost 5,351 subscribers; 51% of its recruitment rate. The churn rate is the percentage of a carrier's total subscribers who leave it, not the percentage of new subscribers for the month, which means there is no accurate picture of the churn rate. However, it seems that Hot Mobile, which already has over half a million subscribers, double the number for Golan Telecom, is still losing far more subscribers that would be expected for a new carrier in the market.

There were also several holidays during April, and all the carriers conducted aggressive marketing campaigns. Golan Telecom launched two campaigns during the month (friend bringing friends, and two free months), and Hot Mobile continued its NIS 49 a month for four months plan. The two carriers dragged the market into a battle that raises the churn rate among customers who are following the price.

Among the three veteran carriers, Pelephone Communications Ltd. seems to have emerged from April more battered than its rivals. It lost a net 8,661 subscribers, compared with 1,249 net subscribers lost by Cellcom Israel Ltd. (NYSE:CEL; TASE:CEL) and 5,766 net subscribers lost by Partner Communications Ltd. (Nasdaq: PTNR; TASE: PTNR). Cellcom's relatively small loss was apparently because it recruited of a large number of subscribers through the IDF and its aggressive marketing campaigns for new subscribers.

Among the mobile virtual network operators (MVNO), YouPhone maintained its fairly high pace of subscriber recruitment, with 4,888 net new subscribers in April. Rami Levy Communications had a net loss of subscribers in April, after one month with a net gain. It recruited 900 subscribers, but lost 2,128.

Published by Globes [online], Israel business news - www.globes-online.com - on May 1, 2013

© Copyright of Globes Publisher Itonut (1983) Ltd. 2013

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