018 Xfone, controlled by Hezi Bezalel, which operates the We4G mobile telephone brand, will stop selling lifelong mobile communications packages and raise its prices starting three weeks from now. The company began a new campaign in which it said that it would stop marketing lifelong packages in three weeks' time, and called on customers to take advantage of the remaining time to join it as the only company in the market offering a lifelong package with 40-gigabyte surfing for NIS 29 a month.
When it launched its lifelong NIS 29 package in April 2018, Xfone said that the lifelong package would be available for only a limited time, but did not cite a cutoff date. The company is now halting its extraordinary bargain. Market sources predicted that the company would continue offering lifelong packages, although at slightly higher prices. The company may also offer packages with a fixed discount price, but for 2-3 years, similar to the NIS 19 two-year package it is currently marketing.
Through its lifelong package, We4G maintained a high churn rate starting two months after it started, except for a few months when the rate was lower. It recruited 20,000 subscribers a month from other companies when it began, but this number gradually diminished. The company recruited 11,000 new subscribers last month, and it appears that it will also lead the market in recruiting subscribers from other companies in February.
To a great extent, the fact that We4G continued its advertising campaign on Keshet for the entire period put very heavy pressure on mobile phone prices and prevented the mobile phone companies from raising their prices. There were other reasons for Pelephone Communications Ltd.'s refusal to raise its price, as Cellcom Israel Ltd. (NYSE:CEL; TASE:CEL), Partner Communications Ltd. (Nasdaq: PTNR; TASE: PTNR), HOT Telecommunication Systems Ltd. (TASE: HOT), and Golan Telecom did, but the fact that We4G stood out with it NIS 29 lifelong package had its effect.
It will be interesting to see how the price increase next month affects prices in the market, but it is doubtful whether there will by any great changes as long as the price of mobile packages remains lower than the companies' average revenue per subscriber.
Published by Globes, Israel business news - en.globes.co.il - on February 6, 2019
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