A total of 2.5 million subscribers switched Israeli mobile carriers in 2015. Golan Telecom Ltd. was the winner in net subscribers gained in December (new subscribers minus lost subscribers) in the cellular market, but it is the yearly total that counts, and the market leader in 2015 as a whole was HOT Mobile Ltd., which gained 158,000 subscribers, compared with 130,000 for Golan Telecom. Golan Telecom's coming out on top in December was predictable, given the aggressive bargain campaign it launched (NIS 29 per package, including 10 gigabyte surfing), which gained the company 42,000 new subscribers.
Golan Telecom's bargain trumped the couples bargain campaign by HOT Mobile (NIS 60 for two lines). The usual calculation is that the price of one gigabyte in the Internet market is worth NIS 3.50-4 for the operator, and 10 gigabytes therefore represents a loss. Even if not many customers consume 10 gigabytes a month on their cellphone, Golan Telecom is still probably losing money on the deal.
Among the veteran operators, it appears that Partner Communications Ltd. (Nasdaq: PTNR; TASE: PTNR) decided to take its foot off the gas in December, and the company lost 8,000 subscribers. Considering that the company has managed to reduce its loss of subscribers in recent months, it is not clear what caused the company to trail so far behind its competitors in December. The answer may lie in the aggressive responses to Golan Telecom's bargain campaign by Cellcom Israel Ltd. (NYSE:CEL; TASE:CEL) and Pelephone Communications Ltd., and Partner's resolution to avoid being dragged into this price war.
In any case, Cellcom and Pelephone lost about the same number of subscribers, in December, 2,500, and the financial results of the marketing war will be seen in the fourth quarter results, since it is obvious that the companies will have to subsidize a great many customers in order to end up with such small net losses.
The gaps between the veteran companies in their yearly results are of interest. Pelephone is ending the year with a loss of 95,000 subscribers (including the subscribers gained by the acquisition of YouPhone's activity), making it the veteran operator that lost the fewest subscribers. Next on the list is Cellcom, which lost 115,000 net subscribers, following by Pelephone, which lost the most - 118,000. If only gross subscribers losses are considered, however (ignoring new subscribers), it turns out that Partner lost the fewest - 601,000, compared with 677,000 for Cellcom and 623,000 for Pelephone. Partner had the poorest record in recruiting new subscribers.
Among the virtual operators, Telzar finished December with better results than its main competitor, Rami Levy. For all of 2015, however, Rami Levi came out on top. Keep in mind that Telzar is a new virtual operator that entered the market only in 2015, and it is therefore logical that Rami Levi recruited more subscribers, although Telzar is doing good work among its target segments.
Published by Globes [online], Israel business news - www.globes-online.com - on January 1, 2016
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