Cellcom profit rises with new subscribers

Competition increased after Israel implemented a number-portability law in December that allows subscribers to change operators and take their phone number with them.

Cellcom's profit rose 8.5 percent in the second quarter as it added new higher-revenue clients, Israel's largest cellphone company by subscribers said Wednesday. Net income climbed to NIS 230 million, or NIS 2.32 a share, from NIS 212m., or NIS 2.15, a year earlier, Cellcom said in a statement. Revenue climbed 9.9% to NIS 1.6 billion. "The results appear excellent and surpass in almost all parameters all earlier forecasts," according to Eran Jacoby, an analyst at Leader Capital Markets Ltd. in Tel Aviv. Average revenue per user increased 0.7% to NIS 149 as the number of clients for Cellcom's so-called third generation of advanced services climbed by 85,000 to reach 608,000, or 19.5% of the operator's subscriber base. Revenue from content and value-added services, including text messaging, climbed 36% to NIS 160m. The so-called churn rate, or the percentage of customers canceling subscriptions, rose to 4.7% from 3.9%. Competition increased after Israel implemented a number-portability law in December that allows subscribers to change operators and take their phone number with them. Also boosting revenue was a 47% increase in handset and accessories sales with the addition of the new thirdgeneration customers. The low dollar-shekel rate provides the company with an "advantage" in purchasing handsets that are then resold to customers in shekels, Cellcom said. (Bloomberg)