Israel's telcos find tricks to boost revenue at subscriber's expense

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Charges for voicemail and second SIM cards are boosting mobile operators' revenue by millions of shekels per month.

The intense competition in Israel's mobile telecom market has resulted in companies boosting their revenue in creative ways. After mobile operators, especially Cellcom Israel Ltd. (NYSE:CEL; TASE:CEL) and Partner Communications Ltd. (Nasdaq: PTNR; TASE: PTNR), failed to raise the prices of their basic monthly packages, the companies have begun charging fees for a range of services such as voicemail and an extra SIM card for the car.

These measures reflect the tough situation of Israel's cellular market, which suffers from excessive competition and too many players. Six months ago Cellcom tried to raise prices but failed because although Partner was supportive through its 012 low-cost brand, Bezeq Israeli Telecommunication Co. Ltd. (TASE: BEZQ) unit Pelephone Communications Ltd. and new player We4G, refused to join the wave of price hikes.

Now, Israeli mobile operators have started charging for voicemail - Pelephone and Cellcom are charging NIS 6.90 per month and Hot and Partner are charging NIS 4.90. The companies did send text messages notifying their subscribers and a warning about the matter in their phone bills.

Bearing in mind that most people pay NIS 30-40 per month for their mobile phone, the charge for voicemail reflects a steep percentage rise. Partner, for example, is also charging NIS 15 for a second SIM card for cars and NIS 1.70 for multi-media messages, up from NIS 0.50.

The people who are most likely to end up losing out are the elderly who still tend to use voicemail or are unaware of the price rise. For the cellular phone companies, the price hike is significant. With 1.5 million subscribers each, the larger companies could potentially boost their income by up to NIS 90 million per month.

Published by Globes, Israel business news - en.globes.co.il - on May 26, 2019

© Copyright of Globes Publisher Itonut (1983) Ltd. 2019

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