Under the heading, "A change in the mobile telephony pricing model," Cellcom Israel Ltd. (NYSE:CEL; TASE:CEL) is changing the structure of its packages for new subscribers. To put it in a nutshell, the company is raising its prices, starting this November.
Cellcom is canceling the one-year commitment for a plan and excluding important apps used by most surfers (Instagram, Waze, WhatsApp, and Facebook); these will not be included in the surfing package, and can be used for free without restriction.
The average price for a package is being raised by NIS 10, starting in November.
A 30-gigabyte package, including calls, SMS, unlimited surfing in Israel for Facebook, Instagram, WhatsApp, and Waze, plus 500 minutes of overseas calls, will cost NIS 49.90 a month. The same package with 50 gigabytes will cost NIS 59.90 a month, and the same package with 100 gigabytes will cost NIS 69.90 a month.
The price of a quatro package that includes a basket of landline and mobile communications services (Internet infrastructure, 30-gigabyte Internet provider, Cellcom TV services, a home landline, and two mobile phone lines) will remain unchanged at NIS 209 per month.
Cellcom is raising its prices, despite the intense competition in the mobile telephony market, for lack of choice. The company is taking a big risk with its new plans, but realizes that unless it raises its prices, its profits will continue falling and will slide into losses. From this perspective, Cellcom is setting a new target for the entire market; the question is whether its competitors will also increase their prices, and what the new players in the market will do. It is believed that the public will be in no hurry to abandon a company because of a NIS 10 price hike, but there will always be price-sensitive customers who will not like it.
Published by Globes, Israel business news - en.globes.co.il - on October 28, 2018
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