Cellcom Reports Quarterly Loss

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Cellcom reported a loss of NIS 16.3 million for the first quarter of 2019, in contrast to profit of NIS 7 million earned by the company during the first quarter of 2018. However, in the last quarter of 2018, the company lost an even larger sum, totaling NIS 35 million. Cellcom’s income from cellular service dropped to NIS 404 million for the quarter. This represents a drop of 7.6% from the year before. The company’s income per customer continues to drop. It came to NIS 47.2, which represents a drop of almost 9% from the year before. Cellcom has succeeded in increasing its customer base, which stood at 2.85 million, at the end of the quarter. The company’s hope for growth is in its TV and internet services.  Cellcom was able to grow its TV service by 8,000 customers and its internet service customers by 9,000 — modest numbers at best. The one bright spot for Cellcom is an increase in the sale of equipment, which includes one time sales of equipment for its fiber optic service. Cellcom equipment sales were up 20% for the quarter.  Cellcom’s income for the quarter totaled NIS 928 million, a drop of 0.5%.

Cellcom is banking on a rapid increase in its number of fiber customers, thanks to its investment in IBC (i.e., the company created together with the Electric company to deploy fiber). According Cellcom CEO Nir Stern, “The company is working hard to deploy fiber to residential units throughout the country, as a result, [he expects] it will improve the company’s cash flow”. The company has NIS 3.86 billion bonds outstanding, which come due between now and 2027.

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