Partner Comm profit, revenue drop
Israel's second-largest mobile phone operator posts 79% drop in first-quarter net profit as it faces increased competition, erosion in prices
Net profit fell to NIS 31 million ($8.5 million) from NIS 146 million ($40 million) a year earlier as revenue dropped 27% to NIS 1.144 billion ($310 million), Partner said on Wednesday.
The company was forecast in a Reuters poll of analysts to earn NIS 64 million ($17.5 million) on revenue of NIS 1.174 billion ($320 million).
Israel's mobile phone industry was shaken up last year with the entry of six new operators, sparking a price war – with unlimited calling plans for $25 a month or lower.
"The results for the first quarter of 2013 reflect the continuing impact of the fierce competition in the telecommunications market, as reflected in the significant price erosion and decline in the company's revenues," Partner Chief Executive Haim Romano said in a statement.
Despite the decline in revenue and profit, Partner continues to invest in its assets, he said. Investments in the first quarter totaled NIS 130 million ($35 million), mainly in the advanced cellular network.
The company reduced its operating expenses by 17% in the quarter, reflecting efficiency measures undertaken over the last four quarters, especially the reduction in the workforce of approximately a third.
"The efficiency measures that we are implementing continue; however they are not yet fully reflected in the company's results," Romano said.
Its subscriber base fell 7% from a year earlier to NIS 2.93 million ($800,000).
Cellcom, Israel's biggest mobile phone operator, had reported a 61% drop in first quarter net profit and a 20.6% decline in revenue.
Pelephone, a unit of Bezeq Israel Telecom, earlier reported a 29% drop in quarterly profit and 22.5% fall in revenue.
