Interconnect fees continue to hurt Cellcom revenues

Earnings before interest, tax, depreciation and amortization fell 14% to NIS 440m.

November 17, 2005 07:04
2 minute read.
cellcom logo 88

cellcom logo 88. (photo credit: )


Dear Reader,
As you can imagine, more people are reading The Jerusalem Post than ever before. Nevertheless, traditional business models are no longer sustainable and high-quality publications, like ours, are being forced to look for new ways to keep going. Unlike many other news organizations, we have not put up a paywall. We want to keep our journalism open and accessible and be able to keep providing you with news and analysis from the frontlines of Israel, the Middle East and the Jewish World.

As one of our loyal readers, we ask you to be our partner.

For $5 a month you will receive access to the following:

  • A user experience almost completely free of ads
  • Access to our Premium Section
  • Content from the award-winning Jerusalem Report and our monthly magazine to learn Hebrew - Ivrit
  • A brand new ePaper featuring the daily newspaper as it appears in print in Israel

Help us grow and continue telling Israel’s story to the world.

Thank you,

Ronit Hasin-Hochman, CEO, Jerusalem Post Group
Yaakov Katz, Editor-in-Chief


Third quarter earnings slowed substantially for Israel's largest cellular provider Cellcom as the company said it continues to feel the effects of the government-induced reduction in interconnect fees for calls made between different cellular networks. Net income dropped 19 percent from year ago levels to NIS 144 million, while revenue was NIS 1.32 billion, 7% lower than the 2004 parallel quarter's level. Earnings before interest, tax, depreciation and amortization fell 14% to NIS 440m. "The drop in income stems from the cut in interconnect fees which we were only able to offset on a gradual basis by increasing rates," the company said in a statement. From March 1, the charge that cellular companies could charge to complete the call of a rival was reduced from 45 agorot to 32 agorot. The decrease was the first in a three-stage program to cut the fees to 22 agorot per minute by 2008. Meanwhile, Cellcom, has been losing market share. In the third quarter, the company had the lowest new subscriber base of the three cellular companies in the market, recruiting 35,000 new customers (net) compared to Pelephone's 74,000 and Partner's 71,000. Cellcom is owned by Nochi Dankner's Discount Investment Corporation. Dankner said earlier this year that he plans to build a major telecommunications company, with Cellcom as its base, to be the main competitor to Bezeq. Following the announcement, Discount shares fell 2% to NIS 93.27 in Tel Aviv.

Join Jerusalem Post Premium Plus now for just $5 and upgrade your experience with an ads-free website and exclusive content. Click here>>

Related Content

The Teva Pharmaceutical Industries
April 30, 2015
Teva doubles down on Mylan, despite rejection