There has been major drama in Israel's mobile phone market after Bezeq Israeli Telecommunication Co. Ltd. (TASE: BEZQ) unit Pelephone Communications Ltd. has lowered its subscriber estimates by 500,000. In the financial report for the second quarter of 2016, Israel's oldest mobile operator lower the estimate of the number of its subscribers by 22% from 2.7 million to 2.2 million by writing off 450,000 per-paid subscribers and 50,000 post-paid subscribers who have been inactive for a protracted period.
The move greatly boosts Pelephone's average monthly income per subscriber to NIS 70. Pelephone has finally come to the conclusion that it is no longer possible to conceal the dramatic fall in their number of subscribers and they have been written off as customers off the old CDMA network, which will be closed down at the end of 2017.
In financial terms, the second quarter was a tough one for Pelephone with revenue down 9.2% to NIS 456 million from NIS 502 million in the corresponding quarter and net profit down 73.5% to NIS 13 million from NIS 49 million in the corresponding quarter.
Bezeq itself reported a 22% fall in net profit for the second quarter to NIS 377 million, while revenue fell 3.5% to NIS 2.51 billion. Bezeq will distribute a dividend of NIS 665 million.
Published by Globes [online], Israel business news - www.globes-online.com - on August 4, 2016
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