Orange Israel 3rd-Quarter Profits Down 20%

­Israel's Partner Communications - which trades as Orange - has reported a 20% drop in its 3rd-quarter profits to NIS 263 million (US$70 million). Revenues were down by 3.3% to NIS 1,575 million (US$419 million), while EBITDA was down 10.9% to NIS 570 million (US$152 million).

Mr. David Avner, Partner's CEO, commented on the quarter's results: "In a highly saturated market, our customer-oriented approach has enabled us to recruit an impressive 64 thousand subscribers, and we are proud to have surpassed 3 million subscribers."

"We continue to experience a challenging competitive and regulatory environment, which is pushing tariffs downwards and pressuring margins. In such challenging times, the Company needs to adjust its cost structure. We have already started an efficiency program that should bear fruits during 2010 with the key aim to improve our profitability levels."

As in the previous quarters of 2009, the decrease in revenues is primarily due to lower outgoing voice revenues reflecting both the competitive market conditions which continue to dilute the outgoing voice tariff and the reduction in the billing interval in 2009 as mandated by the Ministry of Communications, as well as the impact of lower roaming activity. Positive impacts on revenues included the growth in total network minutes reflecting the approximate 4.4% increase in the subscriber base and an increase in the proportion of higher-than average ARPU post-paid subscribers, as well as increases in content and data revenues (including SMS services) and revenues from noncellular services.

Approximately 64,000 net new subscribers joined Partner Communications in Q3 2009. The active subscriber base stood at approximately 3,008,000 on September 30, 2009. This included approximately 2,210,000 postpaid subscribers (73.5% of the base) and 798,000 prepaid subscribers. The quarterly churn rate for Q3 2009 was 4.2% compared with 3.9% in Q3 2008, the increase being attributable to higher churn of lower contribution pre-paid subscribers.

By quarter-end, approximately 1,199,000 subscribers were subscribed to the 3G network. Total market share at the end of the quarter is estimated to be approximately 32%, no significant change from the previous quarter.

A couple of months ago, Hutchison Telecom announced the long expected sale of its 51% stake in Partner is to the local handset distributor, Scailex Corp for approximately US$1.38 billion. Of the remaining shares in the company, 43.4% is listed on the local stock exchange and 5.3% is held by the founding shareholders.

Posted to the site on 9th November 2009