Cellcom's declaration of its second large dividend this quarter may have come as a surprise to those who see declining profits amongst cellular providers, but not to analysts who follow the industry. "In all three cellular companies, there's been a change in ownership and they now have the opportunity to capitalize on their investment," said Eran Jacoby, telecommunications and technology analyst at Leader Investment House. "Especially in the case of Cellcom and Pelephone, there is a window of opportunity for the owners to make the most of their investments before they take the companies public." Discount Investment Corp, which owns 90 percent of Cellcom, said Monday the cellular unit would pay a NIS 1.7 billion dividend, and that it will use its NIS 1.52b. share to pay back a $660m. loan it took from Bank Leumi to finance its acquisition of Cellcom. In connection with the Discount's purchase of Cellcom in September, Cellcom committed to go public within three years and to pay shareholders a dividend of 75% of its annual earnings. In a similar way, Jacoby added, the new owners of Bezeq are declaring dividends from subsidiary Pelephone before taking that cellular company public. Last month, Bezeq said it would distribute NIS 1.2b. in dividends to its shareholders and that it would receive NIS 300 in a payout from Pelephone. The third operator, Partner Communications, also implemented a dividend distribution policy after its Hong Kong-based parent Hutchison bought out an Israeli shareholder last year. Partner has said it would distribute a cash dividend of 65 agorot per share, or a total of NIS 100m., later this year. All three companies reported a decline in profits for 2005, after the government ordered them to cut rates, limiting the amounts they can charge for calls made between cellular networks. "The growth cycle in the industry has ended," said Richard Gussow, senior analyst at Excellence Nessuah. Miko Mor, an analyst at Gaon Investment House, noted that the companies' income lines are not growing even though the number of subscribers increased. "Their prices are going down so there aren't any serious opportunities to increase income," Mor said. "But you can be in a situation where you are not growing but there is a lot of cash flow and that's where the dividend is coming from." Leader's Jacoby said these companies hold "loads of money and have a very nice cash flow from operations." Cellcom recently raised NIS 1.75b. in a bond issue and in January paid its first dividend of the year, a total NIS 1.7b.