Israeli market leader Cellcom maintained a lead of more than quarter of a million at the end of Q2 08 with 3.12m customers compared to 2.86m for nearest rival Partner. On an annual basis, Cellcom saw 5.3% growth to its customer base, almost half the 10.5% rate recorded for the prior twelve months but a good result nonetheless given that growth has slowed considerably in the Israeli market. Indeed, both Partner and Pelephone lost customers in Q1, and although CellcomÃ's Q2 net additions of 22k lagged behind the 33k recorded by Partner, on a half-yearly basis Cellcom was well ahead with a 44k gain compared to a 4k loss for its rival.
Despite outperforming its rivals in 2008, CellcomÃ's Q2 08 figure for net additions was a substantial drop compared to the 32k recorded in Q2 07. This was partly due to an increase in quarterly churn from 3.9% to 4.7%. With penetration in Israel now above 125%, higher churn rates are a key feature of the market, as the players jostle for customers, and Partner saw a similar year-on-year rise in its rate. A more positive result for Cellcom was the upward trend in ARPU, which gained NIS 1 compared to Q2 07 with a quarterly average of NIS 149. In fact, Q2 08 was the fourth successive quarter in which ARPU rose compared to the respective year-earlier quarter, albeit by a maximum of NIS 2.
One of the key factors behind this rise was the continued growth of the W- CDMA customer base, which was up 186.8% annually to 0.61m. This is equivalent to 19.5% of CellcomÃ's total customers, up from 7.2% at the end of Q2 07. Despite its overall market leadership, Cellcom is in third place in the 3G race, but it is gradually gaining on its rivals.
The growth to both customers and ARPU showed through to the top line, with service revenues up 6.3% to NIS 1,410m and total revenues up 9.9% to NIS 1,600m. The importance of the growing 3G base was reflected in a 35.6% rise in revenues from content and value added services and a 47.3% rise in handset revenues. Operating profit also showed an impressive rise of 25.7%, taking the Q2 08 total to NIS 431m, while EBITDA was up 14.7% to NIS 617m.
Posted to the site on 20th August 2008
Total Revenues and Content/ VAS Proportion of Total
Posted to: www.cellular-news.com/story/33167.php